 |
Marketing Minute
03/11/2010 - Why a crop failure in one country will only have a small impact on world wheat prices and why buying a 3D TV for your horse is a waste of money
The world is awash in wheat. The International Grains Council is predicting that this year’s wheat crop will come in at around 650 million tonnes. While that is down about 20 million tonnes from last year, if it comes to pass it will be the 3rd largest wheat crop ever. The good news is that the IGC expects that wheat demand this year will also be about 650 million tonnes. So if these predictions come true then supply will roughly equal demand. So does this mean that if there is a crop failure that wheat prices will be going up? Unfortunately, that is not necessarily so. If the US, Europe, Canada and Australia combined only grow half of the wheat crop and everyone else grew the same amount of wheat as they did last year total world wheat production would be about 555 million tonnes. If we add the expected carry in from the 2009 wheat crop there will be 752 million tonnes of wheat available. That is about 100 million tonnes higher than the projected demand. This would put the stocks to usage ratio at about 15%. That is snug but not overly tight. What these numbers show is that localized crop failures will not have much of an impact on world wheat prices and even a massive global wheat crop failure could see sufficient wheat crops still available to meet demand.
Trivia facts: The total length of all the blood vessels in your body is 87,000 km. or twice the circumference of the Earth’s equator. Like humans, animals such as tigers, lions, and sharks can all see in 3-D because both of their eyes face the front. Animals like rabbits, horses and other with eyes on either side of their head can’t!
|
|
|
PREPARED BY THE NORTH EAST TERMINAL MARKETING TEAM
|
|
|
|
|
