![]() ![]() In response to rising prices, demand for corn fell last year for the first time in a decade - contracting nearly 3 per cent between 20.Īt the same time, farmers were trying to cash in on the high market price by planting more corn. ![]() Drought in parts of South America as a result of the La Niña weather phenomenon also hampered grain harvests, supporting the market. Russia’s invasion of Ukraine, one of the world’s largest grain exporters, sent prices of corn and other cereals soaring last year. The price fall comes as other key agricultural commodities such as wheat drop from last year’s highs, in a reversal of price trends that had sharply pushed up food costs for consumers. Cheaper animal feed tends to lead to lower costs for meat and dairy producers and cheaper products for consumers. This had thrown a “wet blanket” on corn, he added. “Supplies have risen dramatically as a result of that higher acreage but demand has stayed sluggish,” said Michael Magdovitz, senior commodity analyst at Rabobank. The fall in prices, which has come after US farmers expanded their crop acreage last year in response to high prices, just as demand was dropping off, is proving a boon for hedge funds, who have been raising their bets on price falls. It had been trading above $8 a bushel in May last year. The price of corn has tumbled to a three-year low as supplies from the US and Brazil surge while demand stagnates, helping to cool food price inflation but heaping pressure on farmers who had been expecting high prices to last.Ĭorn, which is used predominantly for animal feed and to produce ethanol, has been trading below $4.50 a bushel in Chicago in recent days, its lowest level since December 2020. Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. ![]()
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