Food Prices Will Rise for Years
by Joseph Dancy
Fri, 17 Dec 2010
Illustrating how tight the global grain markets are becoming, and the concern of governments over higher grain prices, yesterday Russian Prime Minister Vladimir Putin said he had signed two governmental resolutions to start supplying grain from the state intervention fund to Russian regions affected by this year’s abnormal heat and drought. “We will separately send the necessary volume of feed grain to the regions, which need to support their cattle breeding while food grain will be sent to Moscow, St. Petersburg, the Moscow and Leningrad regions. The work will start in the nearest future. The documents have been signed and will be released today,” Putin noted.
The Ukraine, also hit by drought last summer, extended its grain export quota, due to end on December 31st, until the end of March 2011. The draft resolution proposed additional quotas for the exports of 500,000 tonnes of wheat and 1million tons of corn.
The U.S. Grains Council this week released a study that indicates China may boost corn imports to a record next year as the U.S. Corn purchases may grow fivefold from 1.5 million metric tons this year “to upward of” 7.4 million tons in the 2011 calendar year, Thomas Dorr, president of the industry group, said in an interview. China, as the world’s biggest grain user, may overtake Japan as the largest corn importer within five years buying as much as 25 million tons by 2015. This would drive prices higher as rising incomes fuel demand for pork and chicken, Rabobank Groep NV said last week.