U.S. Crop Report Signals Worsening Global Food-Insecurity Crisis
(Bloomberg) - On the same day the World Food Program was awarded the Nobel Peace Prize for its fight against hunger, new figures from the U.S. government showed that closer crop supplies could exacerbate the global food inequality crisis.
In its hotly watched monthly harvest report, the U.S. Department of Agriculture said Friday that global soybean supplies will be smaller than expected, signaled growing competition for global wheat supplies, and highlighted dry weather as a threat to crops in parts of South America and Europe.
Taken together, the report suggested that global food prices could continue to rise, making adequate nutrition more expensive as millions of people become unemployed and economic problems worsen.
Just this week, the United Nations released its readings for global food prices, which showed that costs rose 2.1% in September, mainly due to grains and vegetable oils. The index is approaching a multi-year high in January. The USDA figures show that the rise could continue if China imports more soybeans and wheat, tightening the global balance sheet.
Prices are rising as the world predicts a sharp spike in food insecurity due to the effects of Covid-19. Up to 132 million people worldwide could go hungry this year, even in many places that used to be relatively stable.
While the world's grain and oilseed supplies remain relatively robust, wild weather, including a recent major wind storm in Iowa, means harvests are less than originally hoped. Average US corn and soybean yields are still record highs, despite fewer acres being harvested.
In Russia's largest wheat exporter, production increased by 5 million tons to 83 million tons, the second largest ever, according to the USDA report. Wheat production was reduced in Argentina, Canada, Ukraine and the USA.
Prices rose in Chicago and investors were drawn to a demand-driven rally. Soybeans for delivery in November rose 2.8% to $ 10.7975 a bushel on Friday, the highest for a most active contract since March 2018. Wheat prices hit a five-year high earlier this week.
"When the rubber hits the road, the world buyer only cares about the price," said Charlie Sernatinger, head of global grains at ED&F Man Capital Markets Inc. in Chicago, in an email.
The prospects for the harvest and higher prices stem from the World Food Program's warning of a "hunger crisis of unimaginable proportions" unless it and other groups with a similar focus are given the financial support they need to do their jobs.
More articles of this type can be found at bloomberg.com
Subscribe now for the most trusted business news source.
© 2020 Bloomberg L.P.
You should check here to buy the best price guaranteed products.
Bitcoin Hits All-Time High, Lotte World Opens in Metaverse
Breaking down where No. 1 recruit Arch Manning could attend college
5 Signs Your Dryer Vent Needs to Be Cleaned ASAP
Stocks drift below record levels as earnings continue
Kendall Jenner Gets Spooky in Ultra-Rare Nike Dunks That Resell for Up to $450K
Camila Cabello Watches Fan Covers on Youtube and TikTok