Panic Buying, Unrest, and Hoarding Drives the Ag Sector
By Joseph Dancy
Global food prices reached record levels last month as the weather around the globe adversely impacted crops. High food prices have already sparked protests across the Middle East and North Africa. The trend in price data indicates that upward pressure on world food prices is not abating. The FAO Food Price index reached its highest level since records began in 1990, topping the peak of 224.1 set in June 2008.
Weather continues to play a large role in disrupting harvests around the globe. Harvests have been at record or near-record for the last two years for many commodities but grain stocks have not caught up with the growth in demand. The recent broad-based crop disappointments occurring in numerous countries means it will take years to rebuild a good supply buffer which would insure food prices remain moderate.