“World Food Day,” the thirtieth anniversary of the event, FAO Director-General Jacques Diouf asked the world “to unite against hunger.” However, the growing imbalance between supply and demand in the global market, prices of agricultural products Quesihaowei compassion was revealed this spring soared since the momentum continues, it seems certain to make people “wake up the memory of hunger.”

In fact, the financial attributes of agricultural products has been greatly inspired today, the price of financial speculation interference effects for the products is also becoming increasingly apparent, and the global economic downturn and the unusual weather, the behavior in the short term to open more speculation profit margins; even in the long run, soaring demand from emerging markets is expected, will also continue to support the formation of the global agricultural prices.

Reverse boost economic downturn

According to China’s Ministry of Agriculture, “National Agricultural Products Wholesale Market Information Network,” the monitoring results, as of October 22, the international market prices of agricultural products across the board increase. Futures market, Chicago Board of Trade (CBOT) soybean futures rose 8.9% qoq; corn futures rose 13.6% qoq, wheat futures rose 2.48% qoq; the New York Futures Exchange (NYBOT) raw sugar futures rose 14.13% qoq, the average price of cotton futures chain rose 10.68%. Spot market, U.S. soybean spot price rose 8.66% qoq; wheat stock was up 3.20% qoq; ring spot price of corn rose 15.27%; Sao Paulo, Brazil sugar spot price rose 7.99% qoq.

Most of the world’s major agricultural products out of the market or close to 10% of the monthly price increase, indicating strong demand in international markets. However, supply of agricultural products is caused by tight supply and demand fundamentals are more important factors: the United States Department of Agriculture estimated the nation’s agricultural prices in October and November to continue to move up the report pointed out that, in addition to the acquisition of U.S. agricultural products overseas economies outside the rumors , weather-related agricultural products will also be driving down the expected harvest, and take sustained pressure on the supply side.

Rabobank report, pointed out that weather is also causing global agricultural prices continued to surge in 2010, an important factor, but more important reason is still the global financial crisis triggered by the economic downturn. The agency said the financial crisis of corporate finance problems, also will be greatly reduced their spending desires; and a high degree of mechanization in agricultural production and industrialization of today, the scale of the supply of agricultural products will therefore significantly declined. Supply and demand imbalance for the promoters to open a larger profit margins, taking into account only to rise in global demand, prices of agricultural products the so-called “bull” market will undoubtedly boost the sluggish economic environment, under the arrival of the reverse.

Russia and Ukraine ordering effect to enlarge

Falling U.S. dollar is in U.S. dollars to promote the soaring prices of agricultural products important factor. Figures show that since mid-June this year, U.S. dollar global measure of six other major currencies, the dollar index has fallen about 14.2%. However, since the end of last weekend the Group of Twenty (G20) finance ministers and central bank governors meeting, Geithner reiterated that the federal government’s “strong dollar” policy, the dollar index rebounded slightly this week, and agricultural products to some extent eased prices continue to rally.

It should be stressed that, in many agricultural products, CBOT wheat futures prices are “firm” to rising for four days, one stroke rose above $ 7 per bushel’s the gateway level. Which, in addition to the United States is facing major wheat growing areas, dry weather, the world’s third largest wheat exporter, the Russian grain export ban is imposed extension of a more direct impact.

Earlier this month 22, the Russian prime minister announced that Russia this year’s harvest 60 million tons of cereals, originally due this year involving wheat, barley, rye, corn and other grain crops and flour export ban will be extended to next July 1; the same as a major exporter of grain in Ukraine also announced the sale of grain export quotas through auction.

Western media pointed out, Russia and Ukraine grain export restrictions do have a global agricultural markets have a direct impact, but more important is the psychological impact on people. Since the ban from the early August announcement that Russia in three months time, the details of grain exports has been several times to make adjustments. The resulting uncertainty in agricultural products will enhance consumer and investor panic desire speculative profits, exports and thus ordering the negative effects are amplified.

Rapid growth of emerging market demand

Rabobank report says that the global economic downturn, abnormal weather, and international financial speculation and other factors, the future of global agricultural commodity prices over time will continue to stay on the rise; “Given the slow recovery in European and American economies, the gains of the duration is likely to last longer than expected. ”

The report also stressed that even if the global economy eventually get rid of the current global financial crisis dragged down prices of agricultural products will also be difficult to obtain callback space. Among them, the rapid growth momentum in emerging economies, demand will increasingly become a significant factor in the price of support. “Demand in emerging economies is expected to result in high key is not in its large population size, but China, India, Brazil and other economies within the scale of the growing middle class.”

Specifically, the expanding middle class will have higher quality products and services to pursue a more intense, and production processes accordingly, the unit will be spent on the product to more energy or agricultural products as raw materials for this part of the commodities the scale of demand will increase in virtually, “which is caused in the past seven years, rapid increases in agricultural commodity prices remain an important reason for the overall.”

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