Another agricultural commodity surges
THE US Department of Agriculture's unexpected warning that America's production of corn (elsewhere known as maize) would drop by 4% in 2010 has sent prices rocketing. They rose by 8.5% on October 11th, the biggest one-day rise in 37 years, and by mid-week corn was trading at $5.88 a bushel. The fact that prices for other crops such as soyabeans and wheat are also bubbling makes it difficult for farmers to judge which will be the most profitable crop to sow for next season, and that may hamper an immediate supply response. The concentration of farming in a few big countries means that a hungry world is dependent for its food on stable production patterns in a small number of places. Whether Russian wheat or American corn, problems in one country can send shock waves through global markets.
