Grain price shoots up as drought hits Europe
Grain prices are being pushed upwards as the worst European drought in decades forces countries to prepare emergency crop irrigation plans.
Forward prices for Irish wheat and barley rose by €8-10/t last week, following a major hike in European milling wheat futures.
New crop barley prices increased from €202-203/t dried to €210-213/t, with wheat prices €10/t higher.
While buyers in Ireland remained cautious, their European counterparts were much more active as drought fears took hold.
European milling wheat futures jumped to three-month highs on Wednesday as the worst drought for decades dashed hopes of a higher output in the world's largest grain-producing region for the 2011/12 season.
Market analysts are forecasting that the drought will have a devastating effect on yields given that the main areas affected -- Germany, France, Britain and Poland -- account for more than two thirds of EU wheat production.
Every passing day results in more concern about the effect of the dry spell on crop development.
Local authorities in France are imposing restrictions on the amount of water that can be extracted to irrigate crops and in Britain plans are being put in place to allow for limited crop irrigation should the situation deteriorate further.