Economy

Food prices may surge next yr on Chinese demand

(Agencies)
Updated: 2010-12-22 17:14

Farm-commodity prices including corn will extend rallies next year, driven by increased demand from emerging markets including China, Bloomberg News reported Wednesday, citing Rabobank Groep NV.

There was "rampant demand" for agricultural commodities from China, and rising corn prices may drive gains in other grains, according to a report from analysts at the bank, the report said. Meanwhile, surging crude-oil costs, low global food stockpiles and a weakening dollar may also bolster prices, it added.

Rabobank's predictions forecasted that food costs may surge next year, potentially paving the way for a reprisal of the global crisis of 2008, when prices of advanced to records. Increased Chinese purchasing of crops is "reshaping" some commodity markets, the report said.

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"Corn will drive the grains complex" next year, with China importing as much as eight million metric tons, the report said.

The Food and Agriculture Organization's index of 55 food commodities rose for a fifth month in November to the highest level in more than two years, the report said.