Wheat – Shortage or Plenty

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Last October the price of wheat futures rose from 250$ to 370$ before slipping back to 350$ due to a combination of falling harvests, low stocks, growing population, and demand for bioethanol projects. In Australia predictions are the harvest will drop to 9.7 million tonnes – a 61% fall from 2006. But Canada is expecing a 3.8% increase, Argentina a 7.2% rise and unsold wheat supplies in the US are predicted to rise. It is unclear if the speculators have got it right and if we are facing a world shortage.

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7 Responses to Wheat – Shortage or Plenty

  1. matt says:

    With water shortages becoming the norm, the madness of using food crops for biofuels will soon become apparent. In the States however subsidy or tax breaks have encouraged a recent building frenzy of bioethanol plants across the country. Let those cowboys out onto the prairies and they just can’t help heading West now can they …. ‘I hear there’s gold out there in them hills cowboy’ 😉

  2. keithsc says:

    Absolutely – biofuels can’t be a long term solution. They will just demand more and more agricultural land and with the rising world price in crops more people will go hungry and more wilderness cultivated.

  3. matt says:

    The EU seems to realise this & is talking about the aspiration at least of a secondary approach to biofuels, such as the use of wood waste. Have to wait & see.

  4. matt says:

    A report regards rising corn prices in Mexico, apparently not helped by supplies from the US being increasingly diverted to ethanol production;

    http://news.bbc.co.uk/1/hi/world/americas/6255781.stm

    Ethanol isn’t mentioned until the last paragraph of the article.

  5. keithsc says:

    So some go hungry while others use food to drive their cars. Will Mexico be able to find corn at a price anywhere that their poor will be able to afford?

  6. Pete Smith says:

    It’s simply not acceptable to produce fuel from food crops, or from non-food crops grown on good agricultural land or cleared forest. The future must lie with non-edible species such as jatropha, which in addition to being a highly efficient producer of oil can play a significant role in alleviating soil degradation and desertification.

    http://www.jatrophaworld.org/

    The Indian government is investing heavily in jatropha production, and has recently signed a large contract with the UK biodiesel company D1 Oils for the supply of refining equipment.

    http://www.d1plc.com/

    Note: the author is a shareholder in D1 Oils

    http://uk.finance.yahoo.com/q?s=doo.l

  7. matt says:

    Jatropha, which I’d never heard of before, seems to tick most of the right boxes. Very interesting. Only had time to briefly look at D1 Oils website but will definitely be going back to it. Thanks Pete.

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