Reply #51: Global food risk from China-Russia pincer [View All]

[Demeter]

http://www.telegraph.co.uk/finance/china-business/8019004/Global-food-risk-from-China-Russia-pincer.html

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...

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...Luke Chandler at Rabobank said the drought has gone on long enough to hit winter wheat planting and damage yields for next year's spring wheat. "At this stage there is no substantial recovery in subsoil moisture levels in Russia," he said.

Ominously, a corn crunch is also creeping up on the world. Global stocks are at their lowest level for 37 years, at a stock to use ratio of 13pc. "This is getting extremely tight," said Mr Chandler, questioning whether the US should divert 36pc of its corn crop into ethanol for fuel...