Soaring food prices will hurt world's poor: FAO

LONDON (Reuters) - Soaring food prices will hurt the world's poor and increase the risks of political upheaval, a senior United Nations food agency official said on Thursday.

"We are squeezed between increasing oil prices and food price hikes," said Alexander Sarris, director, commodities and trade, of the Rome-based Food and Agriculture Organization (FAO).

He said the world's poorest people were the most vulnerable to the impact of surging grain prices, driven by falling stocks, rising production costs due to higher energy prices, adverse weather, faster economic growth and increasing biofuels demand.

The slide of the dollar against other currencies had not helped, as budget allocations for aid by the United States, the world's top food aid donor, bought less food, Sarris told Reuters at a commodities conference.

"Food aid shipments are going down because the (U.S.) Congress approves a dollar amount and that means lower quantities being shipped," he said.

Sarris spoke of increasing risks of political instability in developing countries as the world's poorest people struggled with rising food costs.

"Countries might close borders to exports," he said, noting that if food supplies are tight, countries might prevent food from crossing their boundaries.

"A lot of problems going on (in food distribution) means more political upheaval," he added.

Sarris was a keynote speaker at the four-day Commodities Week Europe 2007 conference in London, which concludes on Thursday.