Learning English - Words in the News
29 February, 2008 - Published 13:27 GMT
Wheat prices hit record highs
The price of wheat has reached record highs after Kazakhstan announced export tariffs to limit supplies being sold overseas. Similar restrictions have already been announced by Argentina and Russia and other countries have outright bans. This report from Clare Lighton:
Market prices for wheat have doubled in the last year and global stocks have fallen to their lowest point in thirty years. Supplies have dwindled because of poor harvests caused by drought or flooding, and to ensure food supplies, many governments have placed restrictions on wheat exports.
Demand is growing because of population growth and increased wealth in developing countries like China and India. High income growth in these countries means consumers with a bigger appetite for meat, dependent on grain and other foodstuffs previously considered luxuries.
And in developed countries like the US many farmers are being persuaded to switch to growing bio-fuels instead of wheat. 40 million tonnes of maize in the US are now used to make the bio-fuel ethanol, and farmers receive hefty subsidies to grow it.
There are other factors too that contribute to price rises, and market speculation is one of them. At a time of widespread fears of an economic slowdown, food commodities like wheat and corn are seen as a good safe bet because they are likely to ride out any recession when other investments might not.
Clare Lighton, BBC
placed restrictions on wheat exports
with a bigger appetite for
to switch to growing bio-fuels
receive hefty subsidies
a good safe bet
to ride out any recession