Wheat hits record price as bad weather prompts inflation fears
Wheat hits record price as bad weather prompts inflation fears
Published: August 24 2007 03:00 | Last updated: August 24 2007 03:00
Wheat prices jumped to an all-time high yesterday as panicked buyers rushed into the market amid extremely tight supplies, raising fears of a global food inflation spike.
Canada, the world's second-largest wheat exporter, warned output might be almost 20 per cent below last year as adverse weather damaged the crop as it had done in Europe and Australia.
Japan and Taiwan, which depend on foreign wheat supplies, bought new cargoes in the international market while India launched a large tender to boost its inventories ahead of its peak demand season.
Gavin Maguire, analyst at Iowa Grain in Chicago, said the combination of disappointing production levels and strong demand was pushing up prices. "Wheat buyers are beginning to panic."
In Chicago, wheat for December delivery surged to an all-time high of $7.54 a bushel. Prices have jumped 110 per cent in the past 12 months and have risen threefold since 2000.
Food industry executives warned that meat, poultry and dairy prices would climb in the short term as farmers and processors passed on higher feed costs to consumers.
Alex Waugh, director-general of the UK Flour Milling Association, said the cost of wheat was at an unprecedented level: "Wheat costs for flour millers in the UK now stand some £500m higher than last year. This has yet to come through in wholesale or consumer prices."
The International Grains Council cut its estimate for the 2007-08 wheat crop to 607m tonnes while forecasting demand would reach 614m tonnes, resulting in a further stock drawdown. It said global wheat inventories were at their lowest since 1979.
James Gutman, of Goldman Sachs in London, said: "Buyers are scraping the bottom of the bushel of the inventories."
Published: August 24 2007 03:00 | Last updated: August 24 2007 03:00
Wheat prices jumped to an all-time high yesterday as panicked buyers rushed into the market amid extremely tight supplies, raising fears of a global food inflation spike.
Canada, the world's second-largest wheat exporter, warned output might be almost 20 per cent below last year as adverse weather damaged the crop as it had done in Europe and Australia.
Japan and Taiwan, which depend on foreign wheat supplies, bought new cargoes in the international market while India launched a large tender to boost its inventories ahead of its peak demand season.
Gavin Maguire, analyst at Iowa Grain in Chicago, said the combination of disappointing production levels and strong demand was pushing up prices. "Wheat buyers are beginning to panic."
In Chicago, wheat for December delivery surged to an all-time high of $7.54 a bushel. Prices have jumped 110 per cent in the past 12 months and have risen threefold since 2000.
Food industry executives warned that meat, poultry and dairy prices would climb in the short term as farmers and processors passed on higher feed costs to consumers.
Alex Waugh, director-general of the UK Flour Milling Association, said the cost of wheat was at an unprecedented level: "Wheat costs for flour millers in the UK now stand some £500m higher than last year. This has yet to come through in wholesale or consumer prices."
The International Grains Council cut its estimate for the 2007-08 wheat crop to 607m tonnes while forecasting demand would reach 614m tonnes, resulting in a further stock drawdown. It said global wheat inventories were at their lowest since 1979.
James Gutman, of Goldman Sachs in London, said: "Buyers are scraping the bottom of the bushel of the inventories."
posted by Alex at
8:58 PM
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