Wheat, the world’s second consumed grain, has undergone a difficult and unstable year due to a series of natural disasters and consequent supply shortages. Apparently the roller coaster ride isn’t over yet, as 2011 crops may again under-deliver on a global scale. Let’s take a look at who the winners and losers might be:
– EUROPE: wheat output in drought-struck Europe may be disappointing. France had its second-hottest April since 1900 and one of the driest since 1953, while the UK had its hottest in three centuries. With the hot, dry weather continuing into May, there is a growing feeling that yields are set to decline.
– RUSSIA: there are speculations that Russia will lift its export ban as early as this summer, but as Russian Prime Minister Vladimir Putin reiterated just recently, the return of Russia to the global grain export market is dependent on this year’s harvest and domestic demand, so for now we are left with a big question mark.
– INDIA: the U.S. Department of Agriculture’s attache predicts that a record wheat crop of 84.2 million tons may prompt New Delhi to allow up to 2 million tons of exports, the first time in five years India would export grain.
– AUSTRALIA: as reported by agrimoney whilst Australia’s wheat exports have boomed (mostly filling in for the Soviet Union), parts of Western Australia have had their lowest rainfall on record for the past 16 months, posing a significant threat to the country’s wheat crop and reducing the likelihood of setting a new national record. The region typically accounts for up to 40% of Australia’s wheat output.
The uncertainty around Russia and India re-entering the wheat trade and the deteriorating prospects around Europe and US drought-struck crops are unlikely to cool down markets or prices in the near future.
sources: Agromoney.com / 7marketspot.com / ft.com
food insider 