Fasten Your Seatbelts, We're Going Sharply Higher
At least that's according to Professor Harald von Witzke of Humbolt University. He says that assuming that oil will be back up above USD100/barrel by 2017 (which seems perfectly reasonable), then we could see wheat prices 70% higher by then, with corn up over 100%.
It is an interesting theory, and not one that I would argue ferociously against. That said, when asked why prices currently don't reflect this, the professor said that the sharply higher levels we saw a few years ago had stimulated increases in production.
Won't that happen again then if wheat goes back to GBP200/tonne?
Maybe we are in for a decade of extreme volatility, where we get these mad price spikes more frequently, followed by deep troughs of despondency as everybody jumps on and off the various bandwagons all at the same time? That wouldn't surprise me in the slightest.
Pig farming I think they call it.
Prof von Witzke's ray of hope
It is an interesting theory, and not one that I would argue ferociously against. That said, when asked why prices currently don't reflect this, the professor said that the sharply higher levels we saw a few years ago had stimulated increases in production.
Won't that happen again then if wheat goes back to GBP200/tonne?
Maybe we are in for a decade of extreme volatility, where we get these mad price spikes more frequently, followed by deep troughs of despondency as everybody jumps on and off the various bandwagons all at the same time? That wouldn't surprise me in the slightest.
Pig farming I think they call it.
Prof von Witzke's ray of hope