By Howard Schneider
Tuesday, February 8, 2011; 10:52 PM
A record drought in China's major wheat-producing areas threatens to push world food prices beyond their current high level, the United Nations warned in a report Tuesday, adding to growing concern about how the rising cost of food is affecting the poor around the globe.
China, the world's largest wheat producer, consumes almost all of what it grows and keeps roughly 55 million tons in reserve. But the prospect of a failed winter wheat crop might prompt the country to import grain on a scale that could put further stress on world prices, the U.N. Food and Agriculture Organization warned.
The FAO's world food price index, a composite indicator of the cost of a basket of goods, is at its highest level since it was introduced in 1990. Wheat prices have roughly doubled since mid-2010, according to International Monetary Fund data.
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Full disclosure: I'm long on wheat.