Written question asked by Baroness Miller of Chilthorne Domer (Liberal Democrat), in the House of Lords. It was answered by Lord Henley (Conservative) on Tuesday, 26 April 2011.

Food: Prices

Question: To ask Her Majesty’s Government what increase there has been over the last six months in the price of (a) rice, (b) maize, (c) wheat, and (d) soya; and to what factors they attribute the increases.

Answer: Over the last six months, rice, maize, wheat and soyabean international nominal prices increased by 7, 28, 9 and 22 per cent respectively. Cereal prices largely reflect the supply and demand situation on the world market. The increase in cereal prices over the last six months is a reaction to the lower wheat production in Russia and other Black Sea countries, and the subsequent implementation of grain export restrictions by Russia and Ukraine. Lower than expected maize yields in the United States and in Argentina due to adverse weather conditions, coupled with robust demand and tightening stocks, have also had an impact. Additional factors affecting all agricultural commodities are higher energy prices, which have pushed up farm input costs such as fuel and fertiliser, and US dollar depreciation. After the large increases experienced in the second half of 2010, prices for grains dropped due to more favourable weather conditions and external events such as the social and political unrest in the Middle East and North Africa, and the Tohoku earthquake and tsunami in Japan. Rice prices rose at the end of 2010 due to robust demand and some perceived tightening of supply in Vietnam, Thailand and the US, and dropped more recently because of improved prospects for Thailand and Vietnam. Soyabean prices increased because of strong demand coupled with adverse weather conditions in Argentina and low global stock levels.

Secondary information