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Last updated: September 4, 2012 7:35 pm
Soyabeans hit a record high after a sharp fall in monthly Brazilian exports raised further fears about falling global supplies.
The worst drought in the US in half a century has pushed corn and soyabean prices above record levels seen during the 2007-08
global food crisis, heightening concerns of a reprise of big food price increases and riots.
CBOT September soyabeans rose as high as $17.94¾ a bushel, beating the previous record reached on August 30, before trading up 1 per cent at $17.81 a bushel.
The rise in soyabean prices to a fresh high came as several UN agencies warned of a “repeat of the 2007-08 world food crisis”.
The UN’s Food and Agriculture Organisation, the International Fund for Agricultural Development and the World Food Programme called for urgent action “to make sure that these price shocks do not turn into a catastrophe”.
The Brazilian trade figures for August, which showed soyabean exports totalled 2.4m tonnes, fell more than 40 per cent
from July when international commodities traders snapped up 4.13m tonnes amid a sharp fall in available supplies from the US.
“Brazil’s exportable supply of soyabeans is running out,” said Chris Gadd, commodities analyst at Macquarie in London, adding that, even at these levels, demand from overseas buyers was holding up.
With the rise in prices failing to dent demand, the bank believes that prices could rise to $20 a bushel, especially as soyabeans are prone to weather risk and any sign of delayed plantings in South America could drive prices higher.
One of the main factors keeping prices high was continued buying by China, said analysts.
Soyabeans are usually crushed into meal fed to animals and meal prices in the largest importer of the oil seed have remained resilient thanks to the government’s intervention in the pork market.
The Chinese government has been buying frozen pork in the past few months in order to prop up the market and help farmers’ falling profits. Slow consumer demand and overproduction have been depressing pork prices and the latest round of buying for its reserves came in early August.
Analysts said the resulting uplift in pork prices in China has had a knock-on effect on feed prices.
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