Not just oil. Last Friday on the Parisian list of Euronext to pay the highest price in 14 years at this part was an OPEC member: Iraq. The Middle Eastern country has in fact announced the purchase of 500 tons of grain for delivery in December. The news, which rained on a market already on the rise, sent prices soaring to $297,25 a ton. But the operators of soft commodities they are convinced that the $300 barrier will be knocked down within the year, against the $215 at the beginning of the year or the $180 that producers were reaching in mid-2020. The phenomenon concerns both the futures market, the subject of negotiations on the Stock Exchange, and the one in physical delivery, on which, among other things, the increase in sea freight rates depends. In Rouen, a point of reference for physical goods, "bread making" has risen to 342 euros per ton. In Chicago, meanwhile, the December maturity increases by 40 cents a bushel.
Why this ride? Also in this case the main culprit is the climate. The drought has compromised part of the crops in North America, Canada in the lead. In Russia, the world's leading producer, the alternation between catastrophic floods and drought has forced Moscow to fix export roofs and to bring forward the imposition of taxes for grain sold across the border last week. A bit like Argentina did which tried in vain to curb inflation by banning the corn sales abroad.
Meanwhile the China has confirmed itself as a consumer afflicted by bulimia: from 7,6 million tons imported in 2019 to almost 30 next year and at least 26 for this year. Why this surge? It is difficult, as always, to understand Beijing's intentions but it seems that one reason for the purchases lies in the need to rebuild the pig population in the Celestial Empire, already decimated by Sars.
And the list doesn't end there. There mixture between frosts and drought it has also hit Brazil, where 14 million tons are missing from the second annual harvest. Finally, the recovery in oil prices has prompted many American producers to allocate part of their production to bioethanol.
Faced with certain numbers it is not difficult to predict a significant increase in cereals: not only wheat but also corn whose rising prices travel in parallel. Not to mention barley: in this case the demand rises from Saudi Arabia to satisfy the needs of dromedaries, great consumers of the precious cereal like whiskey connoisseurs, as evidenced by the decision of the Flemish Boortmalt to open a "malthouse" in the States.
It's not good news on the inflation front, even if, finally, the producers of the Old Continent can count on more than satisfactory prices, with even double-digit increases for a product which, in Italy as in France, is of extraordinary quality, the best of the last decade, such as certifies the Cai, Agricultural Consortiums of Italy, the first organized reality of production with almost 3,5 million quintals of cereals managed and stored.
Today at Milan commodity exchange the rally in prices continues, inaugurating the eighth week of upswings. All categories are up by 2 euros per tonne to 312,5 euros (the bread-making industry). The prices of the Bologna Commodity Exchange are even higher. Everywhere, after all, the 2021 harvest it will be remembered for the very few impurities and higher than average proteins. But, alas, yields per hectare are decreasing almost everywhere: in Puglia (-30%), in the Marches, in Abruzzo and in Molise (-20%), in Tuscany (from -30% to -50%), in Lazio (-50%). The only exception is Emilia-Romagna which scores +20%. Too little to stop the rush of the expensive sandwich.
