Analyst's note:  Again we see the impact of poor gov't policies as they direct the world's food into energy.

UNITED NATIONS, Jan 10 (IPS) - The United Nations, which is trying to reach out to nearly a billion undernourished people, some living in perpetual hunger, is anticipating another food crisis later this year.

And the signs of impending trouble have been there for some time.

[....] Asked the reasons for the anticipated shortages, Mousseau said: "One cannot use the word shortage if you consider that more than one-third of the cereals produced in the world goes to animal feed and that a growing share of food production is going to agrofuels."

So there is no global shortage today, just as there was no shortage in 2007-2008.

The world actually produced 2,232 million tonnes of cereal in 2008, a historic all-time production record, Mousseau pointed out.

The global production level for 2010-2011 is slightly below the 2008 record, but with higher levels of global stocks.

As opposed to 2008, he said, when rice initially drove the global increase in cereal prices, in 2010-2011, it is wheat prices that first started to increase following poor crops in Russia and Eastern Europe.

Similar to 2008, the rise in food prices is a combination of different factors: a bad harvest in one part of the world brings pressure on the market, which sends signals to speculators, who start then to buy, which leads to further price increases.

The correlation between oil and food prices is once again obvious: as seen in 2008, current high oil prices make agrofuels more profitable and are therefore pushing more food crops into the ethanol and biodiesel plants, Mousseau said."