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A sharp rise in commodity prices has led to global food shortages this spring, but exporting countries are expecting good summer, fall and winter harvests, which should provide some short-term relief. Nevertheless, demand-side factors will remain in play, which will likely mean that food prices will resume their upward trajectory in the spring of 2009.
According to reports released in May by the U.S. Department of Agriculture, global wheat production is projected to reach a record 656 million tons in 2008-2009, while global consumption is projected to surge to 642 million tons, almost 22 million tons above 2007. While the 2008-2009 harvest is expected to be the first crop in three years to exceed total consumption, global stocks will remain at historic lows. Meanwhile, global trade is projected to climb to a record 117 million tons.
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