The strain of the fungus, which produces a rusty colour on the stem of wheat and slowly destroys the plant, has spread to Kenya, Uganda and most recently Ethiopia, where it has affected production of small-scale farmers who produce around 217,000 tonnes of wheat annually.

"The advent of the new strain damaging wheat production in Ethiopia, one of the poorest countries in the world where some seven million people are seeking food aid, is scary," Abera Deressa, Deputy Director-General of Ethiopia's Agriculture Research Organization, said.

"We know some damage has been done by the fungus to Ethiopia's wheat production, but we cannot tell the extent of the damage because we are in the assessment process," he told Reuters.

The fungus is spread by the wind and is carried by travelers who have visited affected areas.

Abera warned that Ug99 could spread farther to Egypt and to Middle East and across the ocean to Europe and Asia unless urgent steps were taken stop it.

In a report released on Thursday in Nairobi, scientists researching the fungus said they feared an epidemic similar to those that caused major grain losses in North America in 1903, 1905 and 1950-54 and famine in Asia.

Abera said the only option for farmers in poor countries like Ethiopia is to find a new strain of wheat which could resist the fungal disease.