Recent rains in the Ethiopian highlands have caused an overflow of rivers in southern Somalia, displacing large number of people and aggravating an already serious food supply situation, the UN agency said in a special alert issued at its headquarters in Rome.According to FAO, a recovery in food production in the previous two cropping seasons had eased to some extent food supply difficulties, but the current poor harvest has offset the temporary respite because of an earlier succession of droughts and years of insecurity. The continuing ban on livestock imports from eastern Africa by countries in the Arabian Peninsula due to Rift Valley Fever is causing substantial loss of income, particularly in northern Somalia. The ban imposed in September 2000 is estimated to have cost the country hard currency earnings of some $120 million.Reflecting a grim food outlook, the FAO alert says cereal prices have increased sharply and are expected to rise further, eroding the purchasing power of a large section of the population. As a result of the global economic downturn, remittances, which normally contribute up to an estimated $500 million to the economy compared to about $60 million in foreign aid, are expected to dwindle significantly. Large numbers of households depending on remittances will have their access to food seriously affected. FAO also noted that the assets of Somalia’s biggest remittance company, Al Barakat, have been frozen following the events of 11 September.