Prices of wheat and soya are set to remain high and
volatile, according to one expert, who questioned whether markets
had read too much into the recent positive reports of cereal crops
resulting in the recent easing of prices.
Speaking to delegates at Chicken 2008,
Ab Agri's
Richard Whiting outlined that over the last 2-3 years, the sector
had seen greater raw material price volatility due to a combination
of poor harvests, increased demand for livestock and biofuel
production. Recent changes in currency exchange rates have also
added to prices.
But he warned that despite this increase, world wheat stocks
will remain close to the historic low seen last year.
With corn (maize), while the global crop is increasing, it is
set to be lower than last year, particularly in the US where the US
is seeing problems with the current crop which was planted late due
to flooding earlier in the year. Similarly, the late-planted US
soya crop is also suffering. But the good news is that the Chinese
crop is up on last year."
However, it's not just the major ingredients that are more
expensive, rises in the price of fats and oils, phosphates,
methionine and vitamins have all added £25/t to compound feed.
He concluded by predicting that prices are likely to remain high
and volatile. "It's not over yet and markets may have read too much
into the recent good crop reports."
