August 9, 2006
Russian traders stocking up on wheat to capitalise on high prices
Russian traders are stocking up on wheat hoping to reap the profits from an expected surge in prices as European grain production suffered this summer due to the heatwave, a report by Reuters said.
Increased demand from Asian buyers is expected to push prices higher at a period when wheat stocks are declining due to high temperatures in many parts of Europe.
Wheat prices have seen a steady rise since the beginning of the year.
According to a report by the UN's Food and Agriculture Organisation, world wheat production would suffer a ten million tonne decline this year.
Some however, doubt that there would be any dramatic price increases.
Dr Heinrich Hockman, of the Liebniz Institute of Agricultural Development, said European markets are relatively small markets to the rest of the world and would thus have a limited impact.
Dr Hockman said wheat stocks would not be threatened, even with some countries reporting an expected 30 percent reduced harvest.
Prices on world markets often experience periods of high prices, before usually followed by periods of lower prices, he said.