Drought, Floods Threaten Wheat Harvests
31 August 2010 Strong grain reserves are expected to keep most countries food secure, but weather phenomenon is downsizing production estimates, inflating prices and sending uncertainty into import/export markets.
The production of wheat, in particular, is in doubt. Russia instituted an export ban on grains this year. Ukraine, which has also been affected by drought across its growing region, is continuing to export grains at least through Sept. 15, but talk that it could impose export quotas on grains drove the price of wheat higher on world markets.
Ukraine revised its grain harvest forecast down 4 million tons to 42 million tons, but the agriculture ministry reports that only 29.2 million tons has been harvested so far this year, which is 21% less than this time last year.
Pakistan is likely to scrap plans to export 2 million tons of wheat as well after devastating floods washed away stored grain, threatening to further tighten global supplies hit by a severe drought across the Black Sea region.
Pakistan has lost at least 725,000 tons of wheat in the country’s worst flooding in 80 years, although traders said there are still enough stocks to meet demand until the next harvest, meaning imports are unlikely.
Diminished yields in Russia, Kazakhstan, Pakistan and Ukraine have prompted the FAO to lower its global wheat production to 651 million tonnes, down from 676 million tonnes forecast in June. Wheat prices have climbed 50% since June, but the FAO says despite some food inflation, global factors are different than they were during the 2007/08 food crisis.
However, if drought persists and interrupts winter wheat planting in Russia and Ukraine, it could jeopardize world supplies in 2011/12.
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