Thursday, November 4, 2010

Wheat – the grain drain

In 2009-2010 the harvest in Russia was so short of expectations that the government banned exports to protect the internal market. This lead to shortages in the market, high prices and a move to other grains like rice. This, in turn, lead to higher prices for rice too.

Figures that are available for 2010-2011 show continued shortfall in the current harvest which means a continuation of lower output in both Russia and the Ukraine. This has been caused, for the most part, by an unusually hot summer and a continuation of the drought. It is rather ironic that Pakistan will also have shortages, but that their shortages are caused by floods.

Additionally, while the wheat harvest yield is below expectation there is also real pressure on rice. Most of the north and north-east of Thailand is underwater and the floods in Pakistan put its own rice production in danger. 

Written by Haydn Leseberg, Trade Manager, Sutlet Group

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