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ASEAN ANALYSIS  2 September 2010

Climate change and other factors affect wheat supply

By David Swartzentruber
AseanAffairs   2 September 2010

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A month ago, agricultural expert M.R. Chandran said at Save Our Planet-Malaysia that “the days of cheap food are over.”

This week wheat prices have hit record highs as Chandran’s foresight comes home to roost. Wheat, makes foods such as bread, pasta and noodles and for three years demand for wheat has topped production.

The United Nations Food and A Droughts in two wheat growing areas, Australia and northwest China, have cut into the wheat supply and unusually cold weather in the Ukraine and excessive spring rains in Canada also curbed production.

On Monday, Kazakhstan, a large wheat exporter, set export tariffs on wheat to curb sales and to help it battle a 20 percent inflation rate. The Kazakhstan decision followed similar restrictions laid down by Russia and Argentina.

Another factor is the demand for biofuels, with farmers putting more land into crops such as corn, sugarcane and rape seed, that can be turned into biofuels and that means less acreage for wheat.

In Asia, rising affluence has increased consumption of western-style baked goods and the same upward mobility has spurred meat consumption requiring more grain to feed animals.

The United Nations Food and Agriculture Organization (FAO) predicts the wheat crop will fall 5.1 percent.

“Wheat markets remain tight but supplies are adequate,” the FAO said. “Among the major cereals, wheat accounts for most of the cut in this latest forecast.”

Wheat production in the United States seems to be the only bright picture as good weather conditions .

I trust this column won’t sound like “The Morning Farm Report,” but food is one of the essentials mankind needs and with clean air and water showing declines it underlines the precarious position of mankind in the 21st century.

Is that the last word? Many Thai exporters have expressed concern over the baht’s appreciation.

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