Cereals High Price Due to Low Global Stocks

Accroding to the latest FAO report, the increasing international wheat price which started in June, peaked in September as a response to the tightening world supplies, record low levels of stocks, and sustained demands. Similar trend was observed in the price of corn despite the bumper crops, indicative of its high demand for biofuel feedstock. The year's cereal harvest would just meet expected utilization levels in the coming year and the low level is expected to remain for the forseeable future, the report says.

These price pressures will be hardly felt by wheat and corn importers from Low-Income Developing Countries. It is estimated that the total cereal import bill of these countries which was in an all time high of US$ 28 billion in 2007 / 08 will reach US$ 52 billion in two years. However corn production is expected to increase in large corn-producing countries such as the US, Brazil, and Mexico.

For more information see the press release at: http://www.fao.org/newsroom/en/news/2007/1000674/index.html