Droughts In Europe, US, Australia, S. America Will Pressure Grain Markets

[hatrack]

PARIS - Drought around the world threatens to leave its mark on global grain trade flows this season, offering welcome new opportunities for some countries expecting large harvests, analysts said on Friday. Against a backdrop of declining world wheat stocks, bad weather has hit world production this year and will raise trading volumes as countries increase their import needs. "Globally, you can't get away from the fact that stocks are declining," AgriNews analyst James Dunsterville said. "We can still produce enough wheat around the world, but the market is becoming more susceptible to regional losses."

The International Grains Council (IGC) sees global wheat production in 2005/06 at 608 million tonnes, down from 624.5 million last season. World wheat stocks are forecast to fall to 133 million tonnes, down five million from the end of 2004/05. Trade is seen rising to 109 million from 106 million tonnes.

From the plains in the US midwest to the wheat prairies of Australia, water shortages have hit. Argentina is dry and India is mulling a wheat import-duty cut to combat domestic shortages. The US Department of Agriculture said severe drought in Illinois and Missouri will hit the corn harvest there.

In Europe, Spain and Portugal are suffering their worst drought on record and in the major wheat importing countries of north Africa, much lower harvests are expected. Drought in Morocco has caused the crop to fall more than 50 percent from last season, leading to a 33 percent rise in grain import needs to near five million tonnes. In Algeria, the crop is seen at 2.5 million tonnes, against 4.0 million last year.

EDIT

http://www.planetark.com/dailynewsstory.cfm/newsid/31868/story.htm

[sam sarrha]

1. the woeld is going to hell and 'Nero' fiddle F*cks around in DC

:dunce: :nopity:

[NNadir]

2. Oh good, famine.

[wli]

3. famine coming to a country near you

e.g. the US

[amandabeech]

4. Our population continues to grow,

mostly as a result of immigration, and we continue to fill productive farm fields with housing, including, but not limited to, those wretched McMansions. If we were so motivated, we could reduce the amount of land necessary to house a burgeoning population, but that would require a change in mindset of a huge percentage of the U,.S. population that I don't see coming any time soon. Even if we did find that motivation, we will not be able to stop the conversion of farmland completely.

I am conflicted on the issue of immigration--I can see both pros and cons, but sometimes I wonder whether the answer to food issues in poor countries is to bring those people here thus reducing the amount of productive farmland, or to send them the food grown on saved farmland as well as other forms of assistance to improve their lives where they are.

Nonetheless, I think that it will be more than two decades before we truly experience famine. My thought is partly predicated on my guess of how much farmland we can destroy, as well as on how much petroleum and natural gas will still be available for the growing, processing and transport of food products here.

[wli]

6. a little runaway global warming will speed that up

[amandabeech]

8. Yes, it certainly could.

Several months ago I read something from a U.S. global warming forecast that discussed the topic. Undoubtedly, the crops that could be grown in certain areas changed quite a bit, which would mean that people would have to change their eating habits.

More importantly, the amount of rain in the plains and upper Midwest would decrease, making it more difficult to grow soybeans and corn in the corn belt, and wheat further west. Wheat may become the mainstay crop of Iowa and Illinois, and Nebraska would become grazing land at best. The report urged farmers to concentrate on improving their soil by actively managing to add more organic matter to the soil and avoid compacting. No till helps, but so does using cover crops, composted manure as fertilizer, more crop rotation and fallow periods. Those practices allow the soil to hold 10-20% more water, thus conserving what rain does fall. However, those practices may cut down on current productivity, so they won't get done until it's too late.

[NickB79]

5. Looks like Malthus might have been right after all

He was only off by a century or so.

[Boomer]

7. "bullish impact on prices"

>> "Given these circumstances, the world balance could tighten rapidly if weather events cause a reduction to the Argentine and Australian harvests compared to current forecasts. This would then have a bullish impact on prices," it added. <<

What a quaint way of saying that the cost of food will tear a hole out of our wallets.