February 21, 2008

Canadian wheat prices balloon on Asian demand

Canadian consumers are feeling the bite of wheat price hikes as stronger demand in Asia competes for the crop, The Gazette reported Tuesday.

Burgeoning demand from China and India, the newspaper said, have propelled wheat prices to surge from the usual US$5 per bushel to more than US$12 per bushel in Canada and US$18 in the US.

Durum wheat, commonly used for pasta, is also trading at record high.

The manager of Montreal's St. Viateur Bagel Shop, Saul Restrepo, said that passing on the cost to consumers was inevitable.

On Monday, flour is estimated to go up from US$32 to US$40 a bag, doubling from last year.

Meanwhile, the Canadian Wheat Board recently increased initial payments for Western Canadian wheat and durum, effective February 21.

The increase will range from CAN41.60 to CAN51.60 (US$40.90 to US$50.8) per tonne with the value dependent on grade, class and protein level.