X

This is not a paywall.

Register for free to continue reading.

We made a promise to you that we’ll never erect a paywall and we intend to keep that promise. We also want to continually improve your reading experience and you can help us do that by registering with us. It’s quick, easy and will cost you nothing.



Nearly there! Create a password to finish up registering with us:


Please enter your password or get a login link if you’ve forgotten


Open Sesame! Thanks for registering.

First Thing, Daily Maverick's flagship newsletter

Join the 230 000 South Africans who read First Thing newsletter.

We'd like our readers to start paying for Daily Maverick

More specifically, we'd like those who can afford to pay to start paying. What it comes down to is whether or not you value Daily Maverick. Think of us in terms of your daily cappuccino from your favourite coffee shop. It costs around R35. That’s R1,050 per month on frothy milk. Don’t get us wrong, we’re almost exclusively fuelled by coffee. BUT maybe R200 of that R1,050 could go to the journalism that’s fighting for the country?

We don’t dictate how much we’d like our readers to contribute. After all, how much you value our work is subjective (and frankly, every amount helps). At R200, you get it back in Uber Eats and ride vouchers every month, but that’s just a suggestion. A little less than a week’s worth of cappuccinos.

We can't survive on hope and our own determination. Our country is going to be considerably worse off if we don’t have a strong, sustainable news media. If you’re rejigging your budgets, and it comes to choosing between frothy milk and Daily Maverick, we hope you might reconsider that cappuccino.

We need your help. And we’re not ashamed to ask for it.

Our mission is to Defend Truth. Join Maverick Insider.

Support Daily Maverick→
Payment options

Wheat Spikes to Fresh 14-Year High on Deepening Supply...

Business Maverick

Business Maverick

Wheat Spikes to Fresh 14-Year High on Deepening Supply Fears

Sunlight behind ears of wheat in a field. Photographer: Bloomberg Creative Photos/Bloomberg Creative Collection
By Bloomberg
04 Mar 2022 0

Wheat soared to the highest level since 2008 on mounting fears of a global shortage as the Ukraine war shuts off over 25% of the world’s exports of the staple used in everything from bread to cookies and noodles.

Prices are heading for a record weekly gain of about 40%, spiking since Russia invaded Ukraine and the U.S. and Europe imposed sweeping sanctions on Russia. The war has closed major ports in Ukraine, and severed logistics and transport links. The fighting also threatens planting of crops in coming months. Trade with Russia has mostly dried up as buyers find it hard to navigate the complexity of sanctions and balk at soaring insurance and freight costs.

Russia and Ukraine are also major suppliers of corn, barley and sunflower oil. Corn has risen to the highest level since 2012, while soybean oil and palm oil have reached records. In the meantime, China, the world’s biggest importer of corn and soybeans and one of the top buyers of wheat, is moving to secure essential supplies in global markets, helping push prices even higher.

Gauge of crop prices hit fresh all-time high

Wheat futures jumped by the exchange limit in Chicago on Friday, rising 6.6% to $12.09 a bushel. There are forecasts for prices to go even higher, piling pressure on food inflation and deepening the dilemma of central bankers on how far to raise rates at a time when the war and sanctions are hurting growth and casting a shadow over the world economy for a long time to come.

Citigroup Inc. said prices could surge as high as $14 or $14.50 in an “extreme bull” scenario if Black Sea exports remain locked out. Even rice has been swept up in the turmoil, with Chicago futures near the highest since May 2020.

The price spike is raising concerns about supplies for top importers and increasing the odds of moves by countries to protect their markets by limiting food exports. Egypt, the biggest wheat importer, is a case in point. Russia and Ukraine delivered 86% of its wheat imports in 2020, according to the United Nations, and the war, sanctions and surging costs are hampering efforts to secure grain. That carries extra resonance in the North African nation, where rising food costs contributed to the Arab Spring protests a decade ago.

Penny-a-Loaf Bread Could See Price Hike as War Chokes Off Wheat

Chinese buyers recently booked about 20 cargoes of American soybeans and about 10 shipments of corn, according to traders who asked not to be identified as they aren’t authorized to speak publicly. The move is another example of the country’s focus on securing supplies at a time of rising prices. Corn futures are up 17% this week, and heading for the biggest weekly gain since 2008.

Argentina, one of the world’s top wheat exporters, will have a mechanism in place through early 2024 to guarantee supplies to local millers and keep down domestic prices of staples like flour and pasta. “The mechanism is a response to the need to decouple prices to protect the domestic market in a global context of war and high sustained wheat prices,” the government said.

Gallery

Comments - share your knowledge and experience

Please note you must be a Maverick Insider to comment. Sign up here or sign in if you are already an Insider.

Everybody has an opinion but not everyone has the knowledge and the experience to contribute meaningfully to a discussion. That’s what we want from our members. Help us learn with your expertise and insights on articles that we publish. We encourage different, respectful viewpoints to further our understanding of the world. View our comments policy here.

No Comments, yet

Please peer review 3 community comments before your comment can be posted