Agricultural prices rise as new opportunities emerge

EVEN the northern hemisphere grain crop’s arrival on the global marketplace and the strengthening Australian dollar could not dampen the Westpac-NFF Commodity Index moving upwards during July, recording a 0.9% rise for the month.
The increases reinforces the growing momentum behind world agriculture prices and heralds the arrival of a new focus on the global food crisis, which have been put to one side over the past 12 months.
“Grain supplies were boosted in July as a solid northern hemisphere harvest gathered pace and continues to pressure the market,” Westpac Senior Agribusiness Economist Andrew Hanlan said.
“Russia and Black Sea countries, in particular, have had a good season and are now looking to export more produce than usual. Meanwhile, India and others are positioning themselves to export this year due to dramatic crop changes away from textiles and towards grain crops, such as wheat.
“However, not all global regions have experienced favourable weather conditions this year, and agricultural production has been hampered in parts of South America and India due to a combination of drought and monsoonal rains wreaking havoc on production. This has contributed to the 11.9% surge in sugar prices.”
National Farmers’ Federation (NFF) Vice-President Charles Burke added: “As the markets begin to focus on the longer term drivers in commodity markets, we are seeing new attention on the global food crisis.
“Australian farmers are perfectly positioned at the heart of an expanding Asia, which is seeing huge population and economic growth. The emerging opportunities for our farm sector are boundless.
“We are also one of the world’s most efficient, clean and green, low energy use food and fibre production systems and a seen as a supplier of choice in meeting the expectations of an increasingly discerning consumer base.”
Over July 2009, the Westpac-NFF Commodity Index increased 0.9%. The Index is now 11.6% lower than a year ago. International commodity prices moderating in the month were wheat (-11.4%), barley (-5.5%) and also canola (-9.3%). That was more than offset by gains in sugar (11.9%), cotton (7.2%), beef (6.5%), dairy (2.3%) and wool (3.1%).
[ENDS] The Westpac-NFF Commodity Index is weighted according to the value of Australian agricultural exports and includes only rural commodities – unlike other price indices that are overshadowed by oil, mineral and energy prices. It provides daily movements based on prices of Australia’s eight key farm exports – barley, beef, canola, cotton, dairy, sugar, wheat and wool – in both $US and $A.