Wheat and corn based ingredients open to price rise

Related tags Wheat Maize

Price increases for key raw materials used by the food industry
threaten over the next 12 months as low global stocks remain open
to unexpected disruptions.

Wheat and corn inventories are still exceptionally low with the US government recently predicting that global wheat stocks-to-use ratio will rise by just four days to 86 days of cover in 2004/05 - the second lowest global inventory in 30 years. This figure compares to 1999/00 when cover hit 131 days.

Despite the low stocks, prices are currently down by more than 25 per cent from the highs earlier this year that bit into the margins for ingredients and other food firms.

But putting pressure on the inventories, the Chinese government is likely to take advantage of the sharp decline in prices to rebuild its stocks of wheat, which have fallen sharply.

Wheat prices are also vulnerable to Australian and Canadian wheat production that could fall short of expectations.

Wheat, along with corn and soy, are the starting point for a range of food ingredients, from starch to gluten, used widely in food applications. But food makers and ingredients firms across the world have been affected by rising prices for basic food commodities.

In each of the last four years world grain production has fallen short of consumption, forcing a draw-down of global stocks for wheat, rice, corn and soybeans. Soybean prices recently hit 15-year highs and wheat and corn seven-year highs.

The November WASDE report from the US government predicts the projected price range for wheat as rising 10 cents on the lower end of the range to $3.20 to $3.50 per bushel.

While wheat and corn remain vulnerable, a report this week from investment bank Goldman Sachs claims expectations of 'extremely high US and global soybean inventories' over the next year could bring stability to the price.

This, despite the recent discovery of soybean rust in the US and the ensuing 'modest supply' disruption. Potentially devastating, the plant disease was detected after harvest, minimising the impact on this year's crop, although observers will closely monitor the situation in the next 12 months.

Related topics Markets Ingredients

Related news

Show more

Related products

show more

Dairy proteins now available from Univar Solutions

Dairy proteins now available from Univar Solutions

Content provided by Univar Solutions | 20-Sep-2023 | White Paper

Foodology by Univar Solutions proudly partners with Leprino Nutrition as their North American distributor of nutritional ingredients and dairy products.

Clean Label Ingredients for Shelf-Life Extension

Clean Label Ingredients for Shelf-Life Extension

Content provided by Lesaffre | 19-Sep-2023 | White Paper

Product waste skyrockets without anti-staling agents and mold inhibitors. But consumers are scrutinizing labels more than ever before. How can you have...

Sustainability Claims Impact on Consumer Purchases

Sustainability Claims Impact on Consumer Purchases

Content provided by ADM | 07-Sep-2023 | Insight Guide

Discover what consumers say about sustainability claims versus what they do in the grocery aisle. Find out in this can’t-miss proprietary study from ADM:...

Cost-effective & efficient: Angel Prebake Solution

Cost-effective & efficient: Angel Prebake Solution

Content provided by Angel Yeast – Yeast and Baking Ingredients | 31-Jul-2023 | White Paper

After years of systematic research and practical application in the production process and essential ingredients for frozen dough, Angel's pre-bake...

Related suppliers

Follow us


View more