World markets are better placed than before to brace poor harvests, say Steve Wiggins and Sharada Keats. 

Steve Wiggins and Sharada Keats

It’s more than two years since the peak of the last spike in world grain prices, back in mid-2008. Since then prices have been drifting back to the levels last seen in 2005, or earlier.

Then suddenly this July all hell breaks loose in the world wheat market with prices up more than 50% from late June and analysts predicting increasing food prices.

The cause? Reports from Canada that harvests will be low on account of too much rain early in the season; while in Kazakhstan, Russia and Ukraine drought has cut the forecasts for the harvest. These countries feature amongst the top eight wheat exporting countries, shifting around one third of wheat traded globally in the mid-2000s. Failing harvests in these countries hits world markets hard.
Continue reading Will wheat prices spike in 2010?