Crop losses in two of the world’s biggest wheat exporters and quality concerns in a third have pushed prices to multi-year highs, adding to worries about food price inflation for millions of the world’s most vulnerable.
Drought and heat continued to fry Canada’s wheat in July, months after a brutal winter hit the Russian crop. Those losses will only be partially offset by gains elsewhere for a crop planted on more land globally than any other, and used for basic foods like breads, pasta and breakfast cereal.
Wheat futures surged this week as the US Department of Agriculture slashed its forecast for Canadian and Russian production, pulling down global stockpiles and trade. A smaller US crop is also adding to the pressure.
The impact will be felt by households and governments alike, especially in poorer nations reliant on imports. And in the US and elsewhere, higher bread costs would be another pressure point for a food supply chain already grappling with labour shortages and logistical snarls.
“Consumers are going to see higher prices, no question about it,” James Doyle, executive vice president at King Milling in Michigan, said. “The price that we pay for wheat as the futures rise, whatever that price is at the time a baker calls, gets translated right then and there into the flour price.”
Wheat’s rally to multiyear highs has also been contra-seasonal, coming when grain silos in the Northern Hemisphere are typically starting to bulge with freshly harvested supplies. Global reserves could sink to a five-year low, the US government forecast, with supplies in exporters particularly strained.
“The market’s looking at a global deficit now,” said Carlos Mera, head of agricultural commodity markets research at Rabobank in London. “That heightens food inflation concerns. Wheat is an essential food staple.”
A wheat export price index calculated by the London-based International Grains Council is now up 46 per cent on the year. Separately, the UN index of global farm-commodity prices is flirting with a decade high.
As the basis of everything from French baguettes to Middle Eastern flatbreads to Asian noodles, wheat prices have a more direct bearing on consumers than crops like corn and soybeans, which are mostly fed to animals.
Consumers are going to see higher prices, no question about it
James Doyle,
executive vice president at King Milling
Commodity fluctuations can take time to trickle through the supply chain. Retail prices can also be sticky and in some cases food costs are subsidised by governments. But higher costs now mean the grain could stay elevated until harvests in the Southern Hemisphere in early 2022 relieve the pressure.
Freight costs to transport grain around the world are also surging. In all, the blow looks particularly harsh for poorer, import-reliant nations already battered by the coronavirus pandemic.
The USDA this week lowered its 2021-22 wheat import forecasts for the North African region, South-east Asia and Afghanistan.
“I’m afraid this is a situation that I do not see any relief,” said Abdolreza Abbassian, economist at the United Nations’ Food and Agriculture Organisation. “There’s so many factors that are unfortunately favouring domestic inflation levels in many parts of the world.”
Russia has been the backbone of global wheat trade for the past few years, often the largest single exporter.
This year’s shrinking crop coincides with the Russian government’s effort to stem rising food prices of its own by taxing cargoes bound for export. That could see buyers shifting to sellers like the European Union and Ukraine.
Paris milling-wheat futures soared 9.5 per cent on the week to the highest since 2012.
The EU wheat crop is bigger this year – 138.6 million tonnes versus 125.9 million, according to the USDA – but relentless rain in France and Germany has impeded the harvest. That’s hurt quality parameters like the so-called specific weight, reducing the amount of flour a given amount of grain produces.
“There will be the availability, now it will be a discussion for these type of criteria,” Philippe Heusele, general secretary of French wheat farmers’ group AGPB, said.
Many countries keep a buffer of grain on hand to prevent supplies from running short, as food shortages are often a precursor to social instability. Buyers will eventually need to restock and, with prices soaring, that comes at a cost to importers’ budgets.
Egypt’s president recently urged higher prices for the subsidised bread it offers its citizens, part of a push to lower government spending. Meanwhile, a streak of crop tenders from Turkey to Jordan have been cancelled or purchases have been lower than expected as importers face sticker-shock.
Other workplace saving schemes
- The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
- Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
- National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
- In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
- Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
UAE currency: the story behind the money in your pockets
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
Killing of Qassem Suleimani
Electric scooters: some rules to remember
- Riders must be 14-years-old or over
- Wear a protective helmet
- Park the electric scooter in designated parking lots (if any)
- Do not leave electric scooter in locations that obstruct traffic or pedestrians
- Solo riders only, no passengers allowed
- Do not drive outside designated lanes
Five famous companies founded by teens
There are numerous success stories of teen businesses that were created in college dorm rooms and other modest circumstances. Below are some of the most recognisable names in the industry:
- Facebook: Mark Zuckerberg and his friends started Facebook when he was a 19-year-old Harvard undergraduate.
- Dell: When Michael Dell was an undergraduate student at Texas University in 1984, he started upgrading computers for profit. He starting working full-time on his business when he was 19. Eventually, his company became the Dell Computer Corporation and then Dell Inc.
- Subway: Fred DeLuca opened the first Subway restaurant when he was 17. In 1965, Mr DeLuca needed extra money for college, so he decided to open his own business. Peter Buck, a family friend, lent him $1,000 and together, they opened Pete’s Super Submarines. A few years later, the company was rebranded and called Subway.
- Mashable: In 2005, Pete Cashmore created Mashable in Scotland when he was a teenager. The site was then a technology blog. Over the next few decades, Mr Cashmore has turned Mashable into a global media company.
- Oculus VR: Palmer Luckey founded Oculus VR in June 2012, when he was 19. In August that year, Oculus launched its Kickstarter campaign and raised more than $1 million in three days. Facebook bought Oculus for $2 billion two years later.
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
Baby Driver
Director: Edgar Wright
Starring: Ansel Elgort, Kevin Spacey, Jamie Foxx, Lily James
Three and a half stars
UAE currency: the story behind the money in your pockets
The alternatives
• Founded in 2014, Telr is a payment aggregator and gateway with an office in Silicon Oasis. It’s e-commerce entry plan costs Dh349 monthly (plus VAT). QR codes direct customers to an online payment page and merchants can generate payments through messaging apps.
• Business Bay’s Pallapay claims 40,000-plus active merchants who can invoice customers and receive payment by card. Fees range from 1.99 per cent plus Dh1 per transaction depending on payment method and location, such as online or via UAE mobile.
• Tap started in May 2013 in Kuwait, allowing Middle East businesses to bill, accept, receive and make payments online “easier, faster and smoother” via goSell and goCollect. It supports more than 10,000 merchants. Monthly fees range from US$65-100, plus card charges of 2.75-3.75 per cent and Dh1.2 per sale.
• 2checkout’s “all-in-one payment gateway and merchant account” accepts payments in 200-plus markets for 2.4-3.9 per cent, plus a Dh1.2-Dh1.8 currency conversion charge. The US provider processes online shop and mobile transactions and has 17,000-plus active digital commerce users.
• PayPal is probably the best-known online goods payment method - usually used for eBay purchases - but can be used to receive funds, providing everyone’s signed up. Costs from 2.9 per cent plus Dh1.2 per transaction.
SPEC%20SHEET%3A%20APPLE%20M3%20MACBOOK%20AIR%20(13%22)
%3Cp%3E%3Cstrong%3EProcessor%3A%3C%2Fstrong%3E%20Apple%20M3%2C%208-core%20CPU%2C%20up%20to%2010-core%20CPU%2C%2016-core%20Neural%20Engine%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EDisplay%3A%3C%2Fstrong%3E%2013.6-inch%20Liquid%20Retina%2C%202560%20x%201664%2C%20224ppi%2C%20500%20nits%2C%20True%20Tone%2C%20wide%20colour%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EMemory%3A%3C%2Fstrong%3E%208%2F16%2F24GB%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStorage%3A%3C%2Fstrong%3E%20256%2F512GB%20%2F%201%2F2TB%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EI%2FO%3A%3C%2Fstrong%3E%20Thunderbolt%203%2FUSB-4%20(2)%2C%203.5mm%20audio%2C%20Touch%20ID%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EConnectivity%3A%3C%2Fstrong%3E%20Wi-Fi%206E%2C%20Bluetooth%205.3%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EBattery%3A%3C%2Fstrong%3E%2052.6Wh%20lithium-polymer%2C%20up%20to%2018%20hours%2C%20MagSafe%20charging%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ECamera%3A%3C%2Fstrong%3E%201080p%20FaceTime%20HD%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EVideo%3A%3C%2Fstrong%3E%20Support%20for%20Apple%20ProRes%2C%20HDR%20with%20Dolby%20Vision%2C%20HDR10%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EAudio%3A%3C%2Fstrong%3E%204-speaker%20system%2C%20wide%20stereo%2C%20support%20for%20Dolby%20Atmos%2C%20Spatial%20Audio%20and%20dynamic%20head%20tracking%20(with%20AirPods)%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EColours%3A%3C%2Fstrong%3E%20Midnight%2C%20silver%2C%20space%20grey%2C%20starlight%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EIn%20the%20box%3A%3C%2Fstrong%3E%20MacBook%20Air%2C%2030W%2F35W%20dual-port%2F70w%20power%20adapter%2C%20USB-C-to-MagSafe%20cable%2C%202%20Apple%20stickers%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20From%20Dh4%2C599%3C%2Fp%3E%0A
More coverage from the Future Forum
