Wheat exports from India, the world’s second-biggest producer, are set to plunge as farmers hoard the crop and a rally in domestic prices turns buyers away to cheaper supplies from Russia and Ukraine. Futures climbed.
Algeria and other wheat importers continue to buy grain even as prices rise, suggesting cereals will be costly in the coming months, a senior economist at the United Nations’ Food and Agriculture Organization said.
Wheat may take over from corn as the driver of grain prices next year because of potential production setbacks, said Abdolreza Abbassian, an economist at the United Nation’s Food & Agriculture Organization.
Higher wheat prices will raise budget deficits in North Africa and Iran because of spending on bread subsidies, said Abdolreza Abbassian, senior grains economist at the Food and Agriculture Organization.
Food security is of less concern in 2010 than in recent years, even as prices rise, because grain stocks are plentiful and a weakened global economy will stunt demand, according to the United Nations’ food agency.
The U.S., the world’s largest wheat shipper, may not have the logistical capacity to meet rising global demand after rains cut the quality of the harvest in Canada and Australia, the United Nations said.
A surge in wheat prices caused by floods and drought in the Northern Hemisphere doesn’t constitute a “global crisis” and should spur more plantings to bolster supply, the Food and Agriculture Organization said.
The global wheat harvest may climb 4.3 percent from the previous season, reaching the second- highest on record, as European farmers expanded acreage while yields rebound in Russia, the United Nations’ Food & Agriculture Organization said.