Traders have said wheat and barley crops might be reduced by as much as 30 per cent from last year, although recent rain in the North had provided some relief.

The ministry spokesman said it was too soon to give detailed forecasts but crops in central and southern Spain had already suffered from a very dry winter and early spring.

"Once we've got all the data from the regions we'll analyse them and make our evaluation of the damage the drought could cause," the spokesman said.

The central Castille Leon, Castille La Mancha and southernmost Andalusia areas were worst hit, while the Levante eastern area was also suffering.

However, traders said fears about the drought would not affect prices until June or July as it was difficult to predict harvests with accuracy until the end of May. "If we have two goodrainfalls in the next two weeks in the North, we could have very good yields there, which would balance out the low yields in the South," one broker said.

Another trader said the quantity and quality of the harvest was determined by the weather in April and May.

Spain's climate, with cold winters, meant that seeds remained dormant throughout the winter, so lack of rain at that time was irrelevant.

Only with the arrival of warmer spring weather did they need rain in order to germinate and develop strongly.

Traders said pressures from rising prices in northern Europe, rather than drought worries, were pushing up wheat prices in the short term.

Imported feed wheat delivery Tarragona was quoted at 23,000 pesetas per tonne on Friday, up from 21,700-22,000 the previous week, while domestic feed wheat Duero ex-store was quoted at 21,500 pesetas, up from 21,000.

"What's happened is the pound has gone up and English wheat has gone up...so everything has gone up. It's not due to internal problems," thesecond trader said.

However, traders expected prices in northern Europe to correct down due to surplus supply in France in coming weeks.

"From what we're hearing about the intervention offers that are being rejected for quality reasons, the surplus of wheat in France could be such as to push the market down a lot," the broker said.

The EU's decision last Thursday to add 400,000 tonnes to a tender for the preferential import of non-EU maize into Spain would not push prices down as maize was in short supply in the country.

"Maize is a bit firmer where there's any left, which is in Duero. In the other regions there's hardly any maize left," the broker said, adding that the 400,000 tonnes would be absorbed with little disruption to prices.

Domestic maize Duero ex-store rose slightly to 22,800 pesetas per tonne at the end of last week, from 22,700 pesetas the previous week. Imported French maize truck Lerida was quoted slightly lower at 23,250 pesetas, down from 23,500.