A tumultuous time for grain markets
The grain markets have certainly had a tumultuous time recently.
Last week we saw a £10 rise on Monday, a £2 drop on Tuesday, followed by a £7.95 drop on Wednesday, with significant variations in between. This makes my job a little tricky but it makes a farmer’s marketing decisions virtually impossible as there is no time to go off and have a think and a chat.
So why do we have this chaos? Well of course it’s all down to one man, Mr Putin.
After cancelling the grain corridor on July 17, his new strategy has been to target Ukraine’s grain terminals.
At the time of writing, he has hit 26.
The strategy is clear, he doesn’t want Ukraine to export anything.
Since July 22, the Ukrainians have exported 37 million tonnes of grain, some to Africa and a lot to Europe.
Since the day a potential grain deal was announced on May 22, the grain price has fallen from record highs, so it would lead most to believe that, if the Ukrainians aren’t going to export as much grain, then surely the market will go up.
However we must not forget that we live in a time of reliance on cheaper food to keep inflation down.
That leads me to ponder whether governments would start to meddle in grain futures markets to keep prices down and that may explain this week's chaos.
by David Roberts, G.O Davies (Westbury) Ltd
