Rising prosperity in Asia, Latin America tied to higher wheat prices

Rising prosperity in Asia and Latin America is driving price for Canadian wheat to their highest levels in 30 year, according to the Globe & Mail. Biofuels have been blamed for the spike.

The USDA’s chief economist blasted the Washington Post at the National Farmers Union meeting over an article connecting high wheat prices to ethanol demand. He said the spike in wheat prices had nothing to do with ethanol; that the 2007 wheat crop was planted before corn prices spiked, and that the price increases is the result of low wheat harvest yields in Canada, the Ukraine, Australia and the European Union.

Achim Steiner, executive director of the U.N. Environment Program, said that linking biofuel crop demand and higher commodity prices was only speculation at this stage. He said that further study would be required to firmly establish such a linkage, noting that it is not likely that biofuel demand is responsible for the increase in Italian pasta or Mexican tortilla prices.

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