Grain prices expected to soar
2013-01-21 11:54:41
An Upper Hunter grains analyst says prices could spike by up to $50 a tonne unless substantial amounts of rain fall across New South Wales in the near future.
A sell-off in futures before Christmas saw a drop in prices of about $30 dollars a tonne but they have been recovering over the past few weeks, with sorghum making a new high just days ago, reaching $288 dollars a tonne.
The price hike is predicted to see a shortage of sorghum, with wheat needed to replace it.
Willow Tree based Grains Analyst Mark Martin says the dry weather being experienced across the state is having a huge impact on prices.
He says unless there are big rain falls of 250 mm or more to facilitate a substantial crop, prices will continue to spike.
"It's increasing the demand for grain because the pastoralists have lost all their feed and what they're looking at is going and drawing on grain stocks to get them through the winter," he said.
"We expect prices could become explosive.
"It could be in the order of another $50 a tonne added to these prices."