Fears of a potential repeat of the 2008 food crisis mounted, after a US government report showed that US crops were being savaged by an intense drought.
Corn prices hit a new record high today on confirmation that the US crop would probably slump by 13pc to a 6-year low.
The last time prices spiked 4 years ago food riots occured in Egypt, India, Indonesia, Mexico and many other countries.
The US Department of Agriculture (USDA) said that the severe drought occurring in the US meant that this year’s harvest would be 10.779bn bushels, compared with 12.358bn bushels last year.
December corn futures traded on the Chicago Board of Trade rose as high as $8.3075 a bushel, a new record, before easing back. Corn prices have surged more than 60pc since June.
The USDA said that crop conditions on August 5 were the worst since 1988, with 69pc of the Midwest seeing moderate to exceptional drought.
There is also concern that wheat prices could surge, as hot weather conditions in Eastern Europe persist.
“A Reuters’ survey shows…that a 30pc lower wheat production is anticipated in the grain belt of Ukraine, Russia and Kazakhstan, despite all the declarations of Russia’s deputy prime minister that there is currently no reason to impose restrictions on wheat exports,” Carsten Fritsch, a commodities analyst at Commerzbank, said.
Below average monsoon rains in India is also adding to concern that global grain crops could plunge.
The Telegraph
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