Wheat prices could defy a recession

The price of wheat traded in Chicago has risen 13 percent this year and more than doubled since June, now standing at just less than $10.50 per bushel.

Declining water tables and unpredictable weather in major production areas have hit crops, and much arable land has been diverted to producing biofuels. Meanwhile, consumers in emerging markets like China are eating more meat as they become wealthier, driving demand for animal feed.


These factors are not likely to go away soon, even as general economic conditions worsen.

“It is mostly driven by world population growth, which is about 75 million people per year, and also by the more protein-rich nutrition trend in Asia,” said Jochen Hitzfeld, a commodities strategist at Unicredit in Munich. He predicts a 50 percent rise in wheat, with prices to average $15 a bushel in 2009.

IHT