LONDON--The risk of another wave of global food price inflation is growing fast, Barclays PLC (BCS) said Wednesday, as U.S. grains and soybeans prices trade within touching distance of all-time highs, due to the nation's worst drought in 56 years, which is massively reducing harvest expectations.
Bad weather in Black Sea grain-exporting regions, a poor start to the Indian monsoons and an incipient El Nino are all adding to weather concerns, the bank said, which suggests that physical tightness could spread from U.S. corn and soybeans to many other regions and crops in coming months.
Rising agricultural commodity prices have sparked severe bouts of food price inflation twice in the past few years, Barclays said, with food riots occurring in many parts of the world in 2007-8 and also contributing to unrest in the Middle East last year.
Now the potential for further production downgrades, strong demand from major food importers and sharply rising input costs all suggest there is significant price upside ahead, Barclays added, especially in wheat, corn and soybeans futures.
http://www.4-traders.com/BARCLAYS-PLC-9583556/news/Barclays-PLC-Risk-Of-Global-Food-Price-Inflation-Grows-On-US-Drought-14419805/
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