World food supplies are caught in a pincer as China becomes a net importer of corn for the first time in modern history and Russia’s drought inflicts even more damage than expected, raising the risk of a global grain shock in 2011.
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| Russian Wheat – GETTY image |
Ambrose Evans-Pritchard
Telegraph
The Moscow bank Uralsib said half of Russia’s potato crop has been lost and the country’s wheat crisis will drag on for a second year, forcing the Kremlin to draw on world stocks.
Wheat prices have risen 70pc since June to $7.30 a bushel as the worst heatwave for half a century ravages crops across the Black Sea region, an area that supplies a quarter of global wheat exports. This has caused knock-on effects through the whole nexus of grains and other foods.
“We had hoped things would calm down by September, but they haven’t: more commodities are joining in,” said Abdolreza Abbassanian, grain chief at the UN’s Food and Agriculture Organisation.
The UN fears a repeat of the price spike in 2008 that set off global food riots. Wheat prices are still far below the $13 peak they reached then, and the global stocks to use ratio is still “safe” at 22pc. However, the outlook is darkening.
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