US corn prices soar as floods inundate Midwest crops
16 Jun 2008
Mumbai: US corn prices climbed to a record near $8 a bushel as storms lashed the Midwest, inundating crops in the US, the largest producer and exporter of the grain.
Surging floodwaters in the US Midwest washed out more than a million hectares of corn and soybean crops and left prices soaring as the flood waters headed toward the Mississippi River.
In early European trading, US corn prices reached record levels amidst reports that more than 10 per cent of the corn crop in Iowa has been washed away by the floods. Nearly 20 per cent of the soybean crop is also under water.
Corn rose as much as 3.5 per cent at $7.9150 a bushel in Chicago and has gained 33 per cent in the past two weeks. It's up 85 per cent in the past year on record demand for biofuels and livestock feed amidst record meat demand in Asia.
Rice for July delivery rose 2.5 per cent, to $20.80 per 100 pounds as of 11:32 a.m. in London. Rice reached a record $25.07 on 24 April after some exporters curbed exports.
The rising corn prices are expected to affect the prices of other food items like meat, milk as also restaurant food as corn is central to US food production - as animal feed, sweetener and flour.
The heavy rains that caused flooding last week appear to have eased, but the receding waters have left a trail of damaged homes and lost crops behind.
Iowa's croplands were the hardest hit, with all of the state's 99 counties affected, according to Iowa's agriculture department.
The state's governor has warned that billions of dollars will be needed to repair damage from the flood and compensate farmers who've lost their crops.
The US department of agriculture estimates US corn stockpiles to fall 53 per cent to a 13-year low before next year's harvest.
The United Nations estimates global food imports to exceed $1 trillion for the first time this year. UN Secretary-General Ban Ki-moon has called for a 50 per cent increase in food output by 2030 against a 60 per cent gain in food prices since the start of 2007.