Grain prices set for another 10% rise

Wheat prices are forecast to rise by a further 10% by 2013, with maize and oilseeds increasing in value by 30%, according to a new study by economists at Berlin’s Humbolt University.

“We are entering a new era: the times when world agriculture produced ever more food at ever declining prices have come to an end,” said report author Harald von Witzke. “People have to get used to prices going up and fluctuating more often than in the past.”

The study predicts that, in the EU, demand for grains will increase by 10-20% in the next five years, while demand for oilseeds will grow by more than 50%.

But the EU’s supply of wheat and other grains will increase by less than 10%, with maize up 15-20% and oilseeds up 30%.

Increase in prices

This supply demand imbalance will fuel the further increase in grain and oilseed prices, says Prof von Witzke.

“We should also highlight that the expansion of organic farming contributes to a decline in the growth of supply, because it is rather land intensive,” the report adds.

At a global level, the indicators are also for continued food price increases, the report adds, with rising incomes and changing dietary patterns in developing countries the real drivers.

“This demand will be difficult to satisfy,” says Prof von Witzke. “The rapid expansion of crops grown for biofuels will divert the already limited agricultural land away from food production. In addition, yield losses will become less predictable due to the effects of climate change and diseases.”

Food production

This will increase the importance of food production in Europe, which will be less affected by climate change compared to other regions of the world.

“The increasing food import needs of developing countries can only be met if industrialised areas produce more and export more food” stressed Prof von Witzke. “Europe has to take that responsibility and use all strategies available to increase its agricultural productivity”.

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