Tags: Global | Wheat | Shortage | Feared | Prices | Surge

Global Wheat Shortage Feared as Prices Surge

Tuesday, 03 Aug 2010 10:05 AM

Severe drought, brush fires and heat waves in Russia, Ukraine and Kazakhstan have driven wheat prices to their biggest one-month jump in more than 30 years, killing half the crop in some areas and reportedly fueling fears of global shortages.

The slump in Russian wheat production has pushed prices up 62 percent since early June, and last month saw the biggest and fastest increase since 1959.

The rise prompted warnings from food companies that prices for flour and products that use flour will soar, The Wall Street Journal reports.

Nonetheless, Russian assurances that its grain exports will remain stable despite crop-decimating heat and drought caused European wheat prices to fall today from their two-year high.

The Russian agriculture ministry said the country’s grain crop would drop to 70 million to 78 million metric tons this year, but insisted cereals exports would remain stable because of bountiful stocks. That is down from 81 million to 85 million tons.

The rise in wheat prices indicates that shortages in agriculture are coming, says Jim Rogers, chairman of Rogers Holdings.

“That’s the straw that broke the camel’s back,” Rogers told CNBC. “We’re going to have much higher food prices over the next few years.”

However, food executives are also warning about surging prices for feeding and malting barley, which could push higher the retail cost of products from poultry to beer.

“This is the fastest wheat price rally we have seen since 1972-73,” Gary Sharkey, head of wheat procurement at UK-based Premier Foods, told the Financial Times.

“The industry will be unable to ignore a 50 per cent rise in wheat prices.”

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Severe drought, brush fires and heat waves in Russia, Ukraine and Kazakhstan have driven wheat prices to their biggest one-month jump in more than 30 years, killing half the crop in some areas and reportedly fueling fears of global shortages. The slump in Russian wheat...
Global,Wheat,Shortage,Feared,Prices,Surge
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2010-05-03
Tuesday, 03 Aug 2010 10:05 AM
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