September 22, 2010

World grain prices could stay at current highs in 2011

The escalation of feed grain prices may continue into 2011, sparking anxiety among importing nations of a repeat of the 2007-08 food price spike, according to an economist with the United Nation's Food and Agriculture Organisation.

Abby Abbassian, an economist for the FAO, said that the surge in grain markets prices in recent days is now "unlikely to recede" until next year due to a tightening of supplies in feed markets.

Prices are also likely to remain high and volatile until more concrete information emerges on the progress of next season's crop plantings in Russia said Abbassian, who is also secretary to the Intergovernmental Group on Grains.

"If corn remains at these high levels for the next few months, this could spill into wheat and the whole group of major cereals could stay at such high levels into the spring of 2011," he said. "Importing countries are getting nervous - they see some more resemblances with 2007-8."