Britons to pay more for a loaf of bread as wheat prices jump
http://www.telegraph.co.uk/finance/news ... -jump.html
4 Aug 2010
Wheat futures jumped to a 22-month high on Monday, hitting $7.11 (£4.47) a bushel on the Chicago Board of Trade. At 1pm New York-time wheat was trading at $6.92.
A severe drought destroyed one-fifth of the wheat crop in Russia, one of the world's largest exporters, and now wildfires are sweeping in to finish off some of the fields that remained after the hottest July for 130 years.
Although grain prices are rising on world markets, with further gains on Monday, they are growing even faster in Russia, so many farmers have liltte incentive to export and are holding on to their harvested grain in the hopes of still higher profits.
"Russia has become the price-maker on the market," said Dmitry Rylko, director general of the Institute for Agricultural Market Studies.
[Armenia imports most of its wheat from Russia]
Global Wheat Harvest in Question
July 26, 2010
By Mike Adams
The world may have to make do with less bread this year if early warnings prove accurate. Many of the world's largest wheat producers are struggling. Canada and Russia, especially, face disastrous harvests. Global stocks look manageable, but what if something happens to America?
On Monday, wheat prices staged the most dramatic rise in more than 50 years. A bushel of wheat traded above $6, a 42 percent monthly increase, but possibly for good reason.
In Russia, the fertile Volga River region is reportedly in crisis. Parched and cracked clay sparsely populated by withered wheat stalks tell the tale. Drought and heat have reduced the harvest by an expected 50 percent of previous years, the Wall Street Journal reported August 3. Russia is the worlds third-largest wheat producer.
Drought has hit Ukraine and Kazakhstan too, reducing harvests. Within the European Union, there have been reports of patchy drought conditions.
In Canadas breadbasket, an extremely wet spring with widespread flooding delayed planting. The Canadian Wheat Board is forecasting a drop of 35 percent in production. But if Saskatchewan and Manitoba get hit with an early winter, then all bets are really off.
Australia, another major wheat exporter, is coping with widespread locust infestations. "Australia continues to be a 'game of two halves' with prospects looking almost ideal in the east but poor in the west," reports commodities analyst Dave Norris.
Nations relying on food imports are already taking action to mitigate shortages and prevent a return to the food riots of 2008. The Wall Street Journal reports that Egypt, the worlds largest wheat importer, concluded its second major purchase of wheat in the past two weeks --at volumes above what it had budgeted for. China is warning against grain hoarding. Indian officials, it has been reported, have allowed last year's plentiful stockpiles to rot in fields, driving up prices and setting the stage for social problems.
In contrast to much of the rest of the world, the United States looks to have a good crop. The U.S. Department of Agriculture says this years harvest is expected to be strong and that global stockpiles are adequate to fill demand.
Norris estimates global wheat production to be 632.2 million metric tons, down from 661.2 million metric tons last year. In terms of supply, it isn't a disaster yet. And Russian reports may be exaggerated, he says.
However, it will be the poor people of Africa, Asia and South America as usual who will be most affected, according to analysts at Barclays Capital. Europeans and Westerners will just have to pay a bit more for their bread.