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Weather Wreaks Havoc on Europe's Grain Crop
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UK: July 27, 2007


LONDON - A mix of blistering heat and heavy rainfall across Europe took its toll on this summer's grain crop on Thursday, propelling wheat prices to new highs and fuelling fears over more food inflation. With temperatures topping 40 degrees Celsius (104 F) in parts of southern and central Europe, farmers in Hungary demanded compensation after sustained drought and the extreme heat ruined 40 percent of the country's maize crop.


And in Bulgaria, a lack of rain has cut the wheat crop to a five-year low of 2.1 million tonnes and threatens to more than halve its maize and sunseed output.

"We are really worried. The average yields of maize will be 1.5 tonnes per hectare, down from the usual 4.5 tonnes. You can see the cobs, they are simply empty," said Krasimir Avramov, chairman of National Grain Producers Union.

As southern Europe sizzles, northern regions, including Europe's biggest grain producer France, has suffered one of the wettest summers in living memory.

Heavy rainfall in Britain has caused widespread flooding, hitting crops including some grains.

Weather fears sent Paris-traded wheat futures soaring.

The price for new crop wheat, the November contract, was up 5.50 euros, or 2.7 percent, at 209.50 euros a tonne on Thursday, its highest level since wheat futures were launched in 1998.

Prices have now risen 50 percent in the last three months.


BURNING CROPS

In Hungary, the farmers' union MOSZ said the hot, dry weather had "burnt" 40 percent of the country's maize crop and more damage is expected as little rain is forecast for the coming days.

The drought was jeopardised the supply of animal feed with livestock breeders also reporting slower animal growth, lower milk production and increased loss of animals due to the heat.

But as rain continues to sweep across France and disrupt the harvest, the country's arable crop office cuts its forecast.

"After a quite dry early spring, weather conditions at then end of the vegetative period, with heavy rainfall, have altered the production potential," it said.

ONIGC cut its estimate of France's 2007 wheat crop at less than 34 million tonnes from 35 million seen earlier this month.

The International Grains Council on Thursday cut its forecast for European Union wheat production to 126.7 million from a previous estimate of 129.6 million tonnes, but said this could be offset by higher output in China.

"Hot and dry weather in southeast Europe results in major reductions in the forecasts for Bulgaria, Hungary and Romania but China's crop estimate is increased after good rains," the IGC's monthly report said.

And in China, President Hu Jintao, in a rare remark on grain security, said his country would rely on itself to secure grain supplies for an increasingly wealthy population.

China has had bumper grains harvests for the last three years, but adverse weather this year means it may struggle to meet last year's levels. The grains harvest this summer, consisting mainly of wheat, rose 1.9 percent.

"We shall focus on raising agricultural productivity, particularly grain production capacity," state television cited Hu as saying.


Story by David Evans


REUTERS NEWS SERVICE

Reuters



© 2008 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Reuters.
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