The problems began in Russia, where relentlessly high temperatures and a parching drought are raising fears that wheat harvests in Russia and its former satellites will fall far short. Now, Germany may see its own wheat crop drop by almost 9 percent this year, further raising prices of the grain.
Bloomberg News reported on comments from Alfred C. Toepfer International GmBH, which reversed its predictions of an increased yield. The trader cited “dry conditions” and “extremely high daytime temperatures” which will affect the summer harvest severely.
On the Chicago Board of Trade, wheat futures for September delivery rose 10.2 cents to $6.376 per bushel.
Food prices have risen at an extremely rapid rate over the past few years, driven by growing populations around the world and the increased consumption of resource-intensive foods like beef in emerging markets like China.
The widespread use of food grains like corn in producing bio-ethanol has also played a role, as food consumption competes with industry for limited supplies.
To meet the gap in supply, growers in the U.S. – the world’s largest exporter of wheat – will probably have to step up their exports, which will at least be beneficial for the American agricultural sector.
Egypt recently booked huge cargoes of U.S. wheat, trying to lock in prices before a potential spike.
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