Tuesday, February 15, 2011

Climate Change to Cause ‘Massive’ Food Disruptions, Olam Says


Climate change will cause “massive disruptions” to supplies of grains, coffee and cotton, supporting prices, Olam International Ltd. said.

“The fact is that climate around the world is changing and that will cause massive disruptions to supply chains,” Sunny Verghese, chief executive officer at Olam, among the world’s three biggest suppliers of rice and cotton, said in a Bloomberg Television interview today. “We’re friendly to wheat, corn and soybeans and bearish on rice.”

Global corn stockpiles were forecast by the U.S. Department of Agriculture to drop at the end of this season to a four-year low, while inventories of wheat will slump 10 percent from a year ago as harvests trail behind demand for both crops. Soybean inventories will drop to a two-year low, the agency said.

Corn futures surged 90 percent in the past year, while wheat jumped 80 percent and soybeans advanced 49 percent as the worst drought in at least half a century in Russia, flooding in Australia, excessive rainfall in Canada, and drier conditions in parts of Europe slashed harvests.

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