(BRUSSELS) - The EU Commission on Tuesday announced its biggest ever food aid package, to alleviate hunger among the world's poorest, and warned swiftly rising prices could yet force it to increase the amount.

"Vulnerable people in many of the world's poorest countries are increasingly exposed to natural disasters, conflict and economic pressures," said EU Humanitarian Aid Commissioner Louis Michel.

"The European Union has an essential role in providing them with food aid, and in restoring food production," he told reporters as the 160 million euro (243 million dollar) package was unveiled.

The funding decision is the largest ever of by the commission's humanitarian aid department and more money will be allocated later in the year, Michel said.

The aid will be targetted at "priority locations"; Sudan, Chad, Somalia, Kenya, Ethiopia, Uganda, Democratic Republic of the Congo, Tanzania, Burundi, the Sahel countries of northern Africa, Liberia, Zimbabwe, Afghanistan, Nepal, Sri Lanka, Colombia and the Palestinian Territories.

At the same time the Commission expressed concern that rising food prices could cut into the package, which was decided last year, and that inflation itself posed a major humanitarian problem to the world's most vulnerable.

"It may not be a tsunami or an earthquake, but inflation exacerbates humanitarian needs and we have to make sure that a financial drought doesn't take place," said Michel's spokesman John Clancy.

He added that extra funds could be found, perhaps from an emergency fund, to ensure that the package does not losing its "purchasing power".

He cited the price of wheat, which he said had shot up by 81 percent last year.

The EU's executive arm estimates that around 18.7 million people will benefit directly from the aid, including children and young mothers, refugees and areas hosting refugees.

Food price rises have been fuelled by record oil prices and rising consumption levels in emerging economies such as China and India where eating habits are changing, plus a relatively poor harvest.

As well as food aid to distressed populations in the aftermath of natural disasters, epidemics, or armed conflicts, the aid will also take the form of more long-term support including seeds, tools and fertilisers.

Text and Picture Copyright 2008 AFP. All other Copyright 2008 EUbusiness Ltd. All rights reserved. This material is intended solely for personal use. Any other reproduction, publication or redistribution of this material without the written agreement of the copyright owner is strictly forbidden and any breach of copyright will be considered actionable.