June 7 (Bloomberg) -- Syngenta AG, the world’s biggest maker of agricultural chemicals, said prices for the main grains will remain above their long-term average as supply fails to meet expanding demand.
World cereal production will fall 3 percent in the next marketing year, while demand will expand by 1.3 percent, the United Nations’ Food and Agriculture Organization said June 4.
“Commodity prices will stay above their long-term average, where they are now,” John Atkin, chief operating officer of Syngenta’s crop protection division, said in an interview in St. Petersburg, Russia, yesterday. “The environment for firm commodity prices is there.”
Prices of wheat, rice and corn rose to records last year, sparking riots from Haiti to Ivory Coast. The number of hungry people in the world will increase to a record 1 billion this year, the FAO said last month. Its index of 55 foods rose for a third consecutive month in May.
Inventories of wheat, corn and soy “are going to be a bit under pressure” at the end of the first half of the year after adverse weather curbed output in Argentina, plantings in Europe shrank and Chinese demand for soybeans remained “strong,” Atkin said.
Demand for grains and oilseeds has been affected by the global recession, “but these declines are likely to be short- lived,” Christopher Mahoney, director of Glencore Grain BV, told a grains conference in St. Petersburg today.
To contact the reporter on this story: Maria Kolesnikova in Moscow at mkolesnikova@bloomberg.net
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