The risk of another wave of global food price inflation is growing fast, Barclays PLC (BCS) said Wednesday, as U.S. grains and soybeans prices trade within touching distance of all-time highs, due to the nation's worst drought in 56 years, which is massively reducing harvest expectations.

Bad weather in Black Sea grain-exporting regions, a poor start to the Indian monsoons and an incipient El Nino are all adding to weather concerns, the bank said, which suggests that physical tightness could spread from U.S. corn and soybeans to many other regions and crops in coming months.

Rising agricultural commodity prices have sparked severe bouts of food price inflation twice in the past few years, Barclays said, with food riots occurring in many parts of the world in 2007-8 and also contributing to unrest in the Middle East last year.

Now the potential for further production downgrades, strong demand from major food importers and sharply rising input costs all suggest there is significant price upside ahead, Barclays added, especially in wheat, corn and soybeans futures.

Rabobank grain analyst Nick Higgins said that the current price rally in the grains complex will be sustained for much of the coming year, keeping food prices at a higher level.

"Food security will continue to be a global issue and, with food price inflation likely to increase in the near term, we believe that securing domestic supplies will remain a priority," he added.

Barclays warned to watch out for new trade restrictions, as the re-imposition of export barriers on agricultural commodities, which were widespread in 2007-08, would represent a significant deterioration of the situation.

The most likely place for such a trend to start would be the Black Sea grain exporters of Russia, Ukraine and Kazakhstan, it added, given their track record and the steep decline in recent grain harvest estimates.

Meanwhile, many big agricultural product importers have been waiting for lower prices, Barclays said, which a number of Asian corn buyers and some big wheat importers from the Middle East and North Africa that may soon be forced to buy.

Barclays said that global inventory levels are broadly above 2007-08's multi-decade lows, but warned that there are still pockets of concern.

The bank said that 2011-12 corn stocks are extremely low in the US.., the world's largest producer and exporter, while the U.S. soybean balance is expected to tighten further in 2012-13, leading to lower inventories that will keep oilseed markets tight until next year's South American harvest.

It added that the drought in the U.S. is continuing to have a crippling effect on yields, which are falling lower still, and, given the severity of current conditions in the main crop growing areas, the problem will not dissipate quickly unless there is a sustained period of above-average rainfall, something that is not in short- or medium-term forecasts.

Write to Michael Haddon at michael.haddon@dowjones.com