On top of record-breaking rice prices and corn through the roof on ethanol demand, wheat is now rusting in the fields across Africa.

Officials fear near total crop losses, and the fungus, known as Ug99, is spreading.

Wheat prices have been soaring this week on top of already high prices, and futures contracts spiked, too, on panic buying.

Experts fear the cost of bread could soon follow the path of rice, the price of which has triggered riots in some countries and prompted countries to cut off exports.

David Kotok, chairman and chief investment officer of Cumberland Advisors, said the deadly fungus, Puccinia graminis, is now spreading through some areas of the globe where "crop losses are expected to reach 100 percent.”

Losses in Africa are already at 70 percent of the crop, Kotok said.

"The economic losses expected from this fungus are now in the many billions and growing. Worse, there is an intensifying fear of exacerbated food shortages in poor and emerging countries of the world,” Kotok told investors in a research note.

"The ramifications are serious. Food rioting continues to expand around the world. We saw the most recent in Johannesburg.

"So far this unrest has been directed at rising prices. Actual shortages are still to come.”

Last month, scientists met in the Middle East to determine measures to track the progress of "Ug99,” which was first discovered in 1999 in Uganda.

The fungus has spread from its initial outbreak site in Africa to Asia, including Iran and Pakistan. Spores of the fungus spread with the winds, according science journal reports.

According to the Food and Agriculture Office (FAO) of the United Nations, approximately a quarter of the world’s global wheat harvest is currently threatened by the fungus.

Meanwhile, global wheat stocks are at lows not seen in half a century, according to the U.S. Department of Agriculture.

Scientists fear that the spores could spread on the wind and reach the U.S. and Canada or Europe.

"It will take five to eight years to genetically engineer a resistance,” said Kotok. "In the interim, U.S. agriculture faces higher risk.”

Kotok is worried that governments around the globe are reacting to the crisis — which he believes is as big of a threat as bird flu — inappropriately by artificially lowering the prices of domestic wheat, and raising export taxes on wheat.

William Gamble, president of Emerging Market Strategies, tells MoneyNews that artificial mechanisms put in place by governments could be as much to blame for the crisis as anything.

"Twenty countries have put food in price controls or export restrictions,” Gamble says.

"Others have restricted futures markets. It is the politicians who are interfering in the markets to protect themselves, and that causes the problem.”

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