Skip to main content

A farmer stacks her crop of maize in Chivi, about 378 kilometres southeast of Harare, Zimbabwe. Supplies of maize and wheat are tightening around the globe.

PHILIMON BULAWAYO/REUTERS

Devastating droughts in the United States and Russia are set to drive global stocks of maize (corn) and wheat to multi-year lows, a world cereal body said on Thursday, heightening fears of a food price crisis on a scale last seen in 2008.

Wheat output from key global supplier Russia is now seen slipping below levels in 2010 when drought destroyed crops and sparked a surprise ban on exports.

The International Grains Council (IGC) said in a monthly report that stocks of maize would fall to a nine-year low of 120 million tonnes with the smaller global crop to result in a drop in consumption in 2012-13 for the first time in nearly 20 years.

Story continues below advertisement

"Exportable (maize) supplies in the U.S. and Ukraine had tightened and, while the next crops in Brazil, Argentina and South Africa may be large, harvests are still several months away," the inter-governmental body said.

The U.S. Midwest has suffered its worst drought in 56 years and the IGC cut its forecast of the U.S. maize crop by 25 million tonnes to 275 million tonnes, bringing it broadly into line with the current U.S. Department of Agriculture estimate.

Earlier this month, USDA cut its forecast to 274 million, a six-year low.

Maize prices rose to a record high earlier this month and wheat prices have also climbed sharply.

South Korean President Lee Myung-bak on Thursday sent a letter to G20 members calling on them to step up joint action to stabilize international grain prices.

Mr. Lee suggested five measures including the proposal that the Group of 20 countries should work together to ease export controls on food items and impose more regulation over market speculation in raw materials, the presidential office said.

A mix of high oil prices, growing use of biofuels, speculation on commodity markets and export restrictions pushed up prices of food in 2007-08, sparking violent protests in countries including Egypt, Cameroon and Haiti.

Story continues below advertisement

The IGC cut global maize production in 2012-13 by 26 million tonnes to 838 million tonnes, well below the prior season's 875 million. Global maize consumption was also cut sharply by 25 million tonnes to 853 million, now also below the prior season.

Wheat supplies are also tightening as the IGC cut its forecast for Russia's crop by four million tonnes to 41 million, now below the amount produced during the last drought in 2010, which led to Russia imposing a ban on exports.

The deteriorating outlook for Russia's grain crops has set off a wave of speculation that it could impose an export ban as it did in 2010. Russia exported 27 million tonnes of grain in its 2011-2012 season, of which 21 million tonnes was wheat.

SovEcon agricultural analysts cut Russia's wheat crop forecast to an even lower 39 million tonnes on Thursday after yields deteriorated in Siberia and Urals regions because of drought.

"World stocks (of wheat) are forecast to contract by 17 million tonnes to (a 4-year low of) 180 million. A projected fall in the major exporters is led by the Black Sea region," the IGC said.

Global wheat production in 2012-13 was seen at 662 million tonnes, down three million from its previous estimate and well below the prior season's 696 million.

Report an error
Tickers mentioned in this story
Unchecking box will stop auto data updates
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies