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Wheat prices reach record level Wheat prices reach record level
(about 3 hours later)
Wheat prices have hit record highs on global commodity markets, bringing the threat of rising bread prices.Wheat prices have hit record highs on global commodity markets, bringing the threat of rising bread prices.
Bad weather in key grain growing areas such as Canada and parts of Europe has limited supplies as demand has risen, sparking fears of a supply shortfall.Bad weather in key grain growing areas such as Canada and parts of Europe has limited supplies as demand has risen, sparking fears of a supply shortfall.
Surging prices are also expected to have widespread fallout for consumers.Surging prices are also expected to have widespread fallout for consumers.
While it will mean higher bread prices, it could also trigger an increase in meat and dairy prices as farmers battle to pass on rising feed costs.While it will mean higher bread prices, it could also trigger an increase in meat and dairy prices as farmers battle to pass on rising feed costs.
Global wheat stockpiles will slip to their lowest levels in 26 years as a result, official US figures predicted earlier this month.Global wheat stockpiles will slip to their lowest levels in 26 years as a result, official US figures predicted earlier this month.
Output fallOutput fall
The dire forecast came as Canadian officials said the country expected its harvest to be slashed by a fifth as a result of drought.The dire forecast came as Canadian officials said the country expected its harvest to be slashed by a fifth as a result of drought.
Meanwhile, its rival Australia - the world's third-largest wheat exporter and a key supplier to Asian regions and South America - has also warned harvests may be reduced by warmer-than-expected temperatures experienced in the spring.Meanwhile, its rival Australia - the world's third-largest wheat exporter and a key supplier to Asian regions and South America - has also warned harvests may be reduced by warmer-than-expected temperatures experienced in the spring.
Crops in the Black Sea area of Europe, however, have been ruined by bad weather, while Chinese production is expected to fall by 10% as a result of both flooding and droughts.Crops in the Black Sea area of Europe, however, have been ruined by bad weather, while Chinese production is expected to fall by 10% as a result of both flooding and droughts.
And as supplies fall, demand from emerging economies such as India is increasing - factors which helped push prices to record highs of $7.44 a bushel on the benchmark Chicago Board of Trade market in the US on Thursday.And as supplies fall, demand from emerging economies such as India is increasing - factors which helped push prices to record highs of $7.44 a bushel on the benchmark Chicago Board of Trade market in the US on Thursday.
Consumer fallout
In the UK, prices have also soared, with bread-making wheat now fetching about £200 per tonne - double last year's level.In the UK, prices have also soared, with bread-making wheat now fetching about £200 per tonne - double last year's level.
While surging prices are beneficial to wheat growers, they do bring further problems.While surging prices are beneficial to wheat growers, they do bring further problems.
A World Food Programme spokesman said the increases could mean its budget would not stretch far enough to help those affected by natural disasters.A World Food Programme spokesman said the increases could mean its budget would not stretch far enough to help those affected by natural disasters.
Meanwhile, accountants Deloitte have warned spiralling wheat prices will add to woes facing British farmers, already suffering in the face of recent floods and foot-and-mouth scares.
"Consumers hold the key to a more resilient future. UK shoppers will have to pay more for their meat," said Richard Crane, food and agriculture partner at the group.