The organisation urged world leaders to take action now or witness millions of people in developing countries being forced into hunger.
Developing countries are bracing themselves for the worst effects of rising corn, soy and wheat prices on their poorest people, said Oxfam. In addition, corn stocks were now at their lowest for six years, the charity said.
While previous food prices had been caused by high oil price and competition for land from biofuel production, US droughts had sparked the current situation, said Oxfam. The world was already witnessing a record number of food related emergencies, it added. The UN estimates that $7.83bn is needed to respond to food-related crises in the Sahel region of West Africa; Sudan; South Sudan; Somalia; the Democratic Republic of the Congo; Afghanistan; Kenya; Zimbabwe and Yemen. But to date a shortfall of £4.1bn exists.
One of the hotspots is the Yemen, which is heavily dependent on food imports, it said. In particular, the region depends on outside supplies for 90% of its wheat. Currently, 10 million people go hungry and 267,000 children are at risk of malnutrition, according to Oxfam.
The organisation issued its warnings ahead of the 'Hunger Summit' presided over by UK Prime Minister David Cameron this weekend.
Max Lawson, Oxfam Head of Policy, said: “For millions of people who are currently struggling to get by, rising food prices could spell disaster. We need urgent action to help the worst affected countries build their food reserves and put in place social safety-nets to enable people to weather this storm.
Short term action not enough
“But short-term action alone is not enough. The sheer scale of current and recent crises shows there is something fundamentally wrong with the way we produce and distribute food - we cannot keep relying on humanitarian agencies to pick up the pieces. Putting food in fuel tanks while people go hungry is nothing short of a scandal."
Oxfam is calling for other governments to follow the UK’s lead in committing more funding to tackle food crises in the short term. Oxfam also wants governments to come together to address long term problems with the way food is produced and distributed globally - problems which have contributed to two food price spikes in the past four years.
The charity also called for an end to biofuel subsidies that pressed farmers to cultivate crops for biofuel production rather than food; stop land grabbing; Increase investment in small-scale farmers and agree a robust and binding global agreement to address climate change.