Bunge sees volatile food prices in 2011

By Reuters
Posted Dec. 29, 2010 at 6:45 a.m.

Grain prices, already at two-year highs, are set to rise further this year before normalising in 2012 as the higher prices prompt farmers to plant more, the head of agribusiness giant Bunge told the Financial Times.

“For the next 12 months I think you will see volatility of prices,” Alberto Weisser said in an interview published on Wednesday. Grain prices rallied in 2010 after poor harvests in Russia and Australia.

The United Nations’ Food and Agriculture Organisation said last week it expected global supplies to remain tight this and next crop season despite better-than-expected output because demand has also risen.

But Weisser, Bunge’s chairman and chief executive, shrugged off concern that food inflation may be here to stay, according to the Financial Times.

Assuming that a normal growing season in the southern hemisphere is followed by a healthy one in the north, prices will start normalising in 2012, Weisser told the newspaper.

“It doesn’t worry me at all. I think there is enough land available, there is enough water available,” he said, adding that with U.S. corn above $6 a bushel and soybeans just under $14 — their highest level in two years — Brazilian farmers would probably plant more, increasing supply.

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