Business Daily (Nairobi)
Allan Odhiambo
10 March 2008
The global food prices outlook darkened on Friday after the Food and Agricultural Organisation revealed that a contagious wheat disease that was previously found only in Kenya has spread to key producing markets in the Middle East.
The latest FAO survey of the wheat market showed the virulent fungi that spread in the entire East Africa region has attacked crops in the main wheat producing countries of Yemen and Iran.
Agriculture experts warned that the situation could worsen if the disease spreads East of Iran to Afghanistan, India, Pakistan, Turkmenistan, Uzbekistan and Kazakhastan - the world's leading wheat producers.
"Detection of the wheat rust fungus in Iran is worrisome," said Mr Shivaji Pandey, the director of FAO's plant production and protection division.
Mr Pandey warned that the fungus was spreading rapidly and could significantly lower output this year.
"It is important that the international community gets this disease under control to reduce the risk to countries that are already hit by high food prices," he said.
Nearly 80 per cent of all wheat varieties planted in Asia and Africa are susceptible to the wheat stem rust (Puccinia graminis) that spreads when its spores are carried by wind over long distances. In Kenya, the rust disease has been particularly destructive in wheat growing districts of Narok and Uasin Gishu.
It has been blamed for the decline in the national wheat production that has triggered a steady rise in the prices of wheat and its products such as bread.
Industry statistics show that the decline in output has triggered a rise in producer prices with the farmers as the biggest beneficiaries. Last year, the price of a 90kg bag of wheat rose from Sh1,800 to Sh3,000 boosted by the acute shortage of the cereal in the market.
Kenya is a net importer of wheat that produces only one third of its annual consumption requirements of 900,000 tonnes. Most of the wheat is imported from Egypt and Mauritius under special arrangements with the Common Market for Eastern and Southern Africa.
Egypt alone is entitled to bring in about 16,000 tonnes of the commodity into the local market each year while Mauritius is entitled to ship in 1,000 tonnes. Analysts, however, said that with the latest fungal attacks in Asia and the Middle-East, even Kenya may find it had to get wheat from Egypt - its duty-free supplier.
This means that the country will have to buy the commodity from markets that do not qualify for duty waivers leaving importers with high import bills.
Such a development is would mean that the processors cut down on the import volumes and aggravate the current supply shortage prompting a steep rise in consumer prices.
FAO says that by end of January 2008, the global prices of wheat were 83 per cent higher compared to a year ago.
Experts said the prices surges are partly due the continued rise in freight charges as China continues to claim a bigger fraction of the global shipping capacity to ferry the raw materials it needs to drive its neck-break industrial expansion. The wheat fungus first was first identified in Uganda in 1999, hence its name Ug99. It later spread to Kenya and Ethiopia onto Yemen where a more virulent strain has recently been identified.
Mr Sanjay, however, said disease surveillance and wheat breeding is already underway to monitor the fungus and to develop Ug99 resistant varieties even though more efforts are required to develop long term durable resistant varieties that can be made available to farmers in affected countries and countries at risk.
Estimation by the Global Rust Initiative, showed that nations within the virus risk zone including Kenya have a joint out put of 117 million tonnes of wheat worth $16.4 billion.
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