World Grain Price Surge Triggering Defaults
Grains suppliers are starting to default on previously agreed sales to major importers, including top wheat buyer Egypt, rather than deliver on contracts that are now losing money because of the huge rally in prices sparked by the U.S. drought.
The worst drought in more than 50 years is wilting crops in the U.S. Midwest and sending prices into overdrive, with corn alone surging by around 50 percent in the last month.
Soybeans have also hit record highs, with wheat not far behind. Crop downgrades in Russia, Ukraine and Kazakhstan as drought followed a bitterly cold winter have added to global price rises, stoking fears of unrest especially in Middle Eastern countries, where high food prices can trigger political protest.