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.”