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Dry and hot weather conditions in the US and Russian Federation has fuelled global wheat prices by 21 per cent to $347 per tonne during the first 3 weeks of July, the United Nation’s body Food and Agriculture Organisation (FAO) has said.
The rising international wheat prices would benefit India, which is exporting the grain since September last year.
“International prices of wheat rose by some 21 per cent in the first three weeks of July. The benchmark US wheat price (No 2 hard Red Winter, FOB) averaged $347 per tonne, 13 per cent higher than in July 2011. But it was still well below the record level of March 2008,” the FAO said in its latest report.
Dry and hot weather conditions in the Black Sea region, particularly in the Russian Federation, reduced planting of the spring wheat for 2012 in the US and strong maize prices are exerting upward pressure on wheat prices, the FAO added.
According to market analysts, the US is facing one of the worst droughts in the last many years, which is leading to a spike in prices of wheat, soyabean and maize as sowing has been affected due to lack of rains. US is one of the biggest exporter of these food commodities.
“Export prices of maize have increased by 20 per cent in the first three weeks of July, compared to their June level. The benchmark US maize price (Yellow, No 2, FOB) averaged $322 per tonne, reaching a new record high,” FAO mentioned in its report.
The prices were underpinned by continuous concerns about the impact of hot and dry weather conditions on yield potential of the 2012 maize crop in parts of the US, it added.
At the Chicago Board Of Trade, wheat for delivery in September rose by 4 per cent to a 4 year high of $9.35 per bushel (21.22 kg), while maize for delivery in the same month rose to a record high of about $8.16 per bushel.
Last September, India lifted the ban on wheat exports through private trade. That apart, in order to ease the storage crunch, the government will export 2 million tonnes of wheat from its godowns.
India is facing a storage crisis because of record 82 million tonnes of foodgrains in its stocks, against the storing capacity of 64 million tonnes.
The country produced a record 93.90 million tonnes of wheat in 2011-12 crop year (July-June), which led to an all-time high procurement of over 38 million tonnes this year.
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