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Economies like Algeria or Rwanda may have to make that tough choice but, for now, China and Brazil aren’t doing that trade off, he said.
China and Brazil “seem happier to use their bounty of liquidity to indulge in inflation, which partly helps to cover the price rises,” he said. “So much of the metals are going into infrastructure in the BRICs that the decision on ‘wheat vs. copper’ is not being made by consumers, but by governments.”
That may soon change.
“Record food prices create social unrest and inflation because they impact the poor most,” said William Gamble, president of Emerging Market Strategies. “Many countries will use price controls, export restrictions, panic buying and subsidies — all of which makes the inflation problem worse.”
“Add in record metal prices and high oil and you have an inflation fire storm,” he said.
And government policies to offset that inflation will be unsustainable, he said.
“Eventually the market reasserts itself and the bubble along with demand for industrial metals collapses.”
MILAN/WASHINGTON - Global food prices tracked by a UN agency hit their highest level on record in January, a problem set to worsen after a massive snowstorm in the United States and floods in Australia.
The United Nations said on Thursday its Food and Agriculture Organisation Food Price Index rose for the seventh month in a row to reach 231 in January, topping the peak of 224.1 last seen in June 2008. It is the highest level the index has reached since records began in 1990.
"These high prices are likely to persist in the months to come," FAO economist and grains expert Abdolreza Abbassian said in a statement.
Wheat underscored the problem affecting commodity prices around the world, settling on Thursday slightly lower after hitting a 2-½ year high earlier in the day. Corn and soybeans, which also have been hovering near long-term highs, also declined.
BELLE PLAINE, Kan. (AP) - An arctic blast that brought subzero temperatures and punishing winds across the Kansas plains has raised new fears for the already drought-stressed winter wheat crop.
The storm dropped massive amounts of snow in eastern Kansas but offered little moisture in the parched western counties where the bulk of the wheat is grown.
Without a protective snow cover the crop is especially vulnerable to frigid temperatures that have settled across the state, experts say. Western Kansas counties only got about an inch of dry, powdery snow — too little to replenish depleted soil moisture the plants will need when they break dormancy in the spring or to even plant another crop then.
The full extent of winterkill and wind damage won't be known until spring when plants green up, said Kansas State University wheat specialist Jim Shroyer...About 37 percent of the winter wheat crop in Kansas was in poor to very poor condition late last month, Kansas Agricultural Statistics Service reported on Monday. About 36 percent was in fair condition with 25 percent rated as good and just 2 percent excellent.
The agency also reported that topsoil moisture was short to very short in 59 percent of the state as of Sunday.
"The final impact remains to be seen, but it does raise fears," said Dan O'Brien, a Kansas State University economist. "We had concerns about the viability of a good number of acres of wheat before this storm came."
CHICAGO (Dow Jones)--Export demand and concerns about planting have pushed U.S. cash prices for hard red spring wheat above $10 a bushel for the first time in 31 months.
Demand for spring wheat, a high-protein variety grown in northern Plains states like North Dakota, has been strong after rains lowered the quality of wheat in Canada and Australia. Traders are worried wet weather may prevent farmers from planting a big crop this spring to replenish supplies because heavy snows could lead to flooding and saturated soils.
"Rivers and streams are still running full. It could be a mess," said Mike Krueger, president of the Money Farm, a grain marketing advisory service near Fargo, N.D.
National cash price indexes maintained at the Minneapolis Grain Exchange last traded at $10.05 1/2 a bushel for hard red spring wheat, reflecting an average basis of -4 3/4 cents relative to Wednesday's settlement of the MGE hard red spring wheat futures contract. The average cash price jumped from $9.77 a day earlier.
The authors paint a bleak picture of the consequences resulting from a shortage of petroleum. As the transportation of goods depends on crude oil, international trade could be subject to colossal tax hikes. "Shortages in the supply of vital goods could arise" as a result, for example in food supplies. Oil is used directly or indirectly in the production of 95 percent of all industrial goods. Price shocks could therefore be seen in almost any industry and throughout all stages of the industrial supply chain. "In the medium term the global economic system and every market-oriented national economy would collapse."
Huge farms and operations. That is the relevant component. The US instituting regs that are squeezing out the innovative smaller operations for the bigger entrenched monstrosities is the problem.
We have enough energy reserves in the states to last us 200 years. But the environment wackos and the government are making it darn near impossible to use our very own resources. But hey, keep listening to ether, it whispers sweet nothings.
It is purposeful that we are not allowed to use our own resources, if you have not figured THAT out yet, you really need some help.
Sri Lanka will lose over one million tons from its upcoming paddy harvest due to recent flooding, officials say.
"We expected a yield of around 2.75 million metric tons from the harvest due in March to April," Kulugammanne Karunathileke, secretary to the Ministry of Agriculture, told IRIN. "After the heavy rains we will only get around 1.75 million."
Karunathileke, the highest ranking official at the ministry, said the country had expected a bumper crop - until flooding, which began in January, left some paddy fields under water for up to 11 days. The worst-hit areas are in the eastern districts of Ampara, Batticaloa, Polonnaruwa, Trincomalee and the north-central district of Anuradhapura.
Together they account for over 1.2m tons of the harvest.
Of the over 700,000 hectares cultivated this season, more than 200,000 have been destroyed, Karunathileke said.
Rice experts warn that yields will probably also be low in areas not directly affected by the flooding.
"The indirect damage is the spread of fungal diseases that will cause the harvest to drop even in areas outside the flood zones," Nimal Dissanayake, director of the Rice Research and Development Institute (RRDI), said.
Feb. 15 (Bloomberg) -- Corn may surge to a record in the first half and be the best-performing agricultural commodity as increased government purchases help to "inflame" the market, according to Agrocorp International Pte.
"Corn is where demand is most imbalanced" against supply, said Managing Director Vijay Iyengar, who's traded agricultural commodities since 1986. Corn reached an all-time high of $7.9925 a bushel in June 2008 and would need to rise more than 13 percent from yesterday's close to exceed that level.
Agrocorp joins Rabobank International and Blackstone Group LP's Byron Wien in forecasting corn at a record in 2011 as demand gains and global stockpiles decline. Corn has surged 90 percent over the past year, beating rallies in wheat and soybeans and contributing to accelerating global food inflation.
OTTAWA — Wheat prices hit a 30-month high Monday on weather worries and increased demand from the politically volatile Middle East and North Africa, with one analyst suggesting China’s massive stockpile of grains has become an “aggravating concern” in the global food market.
The continued upward pressure on food prices — which helped trigger the upheaval in Egypt — could become a hot political issue, starting this week in Paris as Group of 20 finance ministers and central bankers gather. As head of the G20 this year, France wants policymakers to tackle the issue of taming commodity prices.
“When food is scarce in the world, food becomes more important than money,” said Carl Weinberg, chief economist at High Frequency Economics of Valhalla, N.Y.
Wheat futures surged in trading on the Chicago Board of Trade to a high last seen in August 2008. Dry weather in key growing parts of China and the United States was one concern. But so was increased demand, as Tunisia and Iraq placed orders for U.S. wheat — in an effort to ward off citizen unrest — and Afghanistan said it would place a 200,000-tonne order in the next few months.