Food prices soar again

America’s worst drought for half a century has sent the price of agricultural commodities soaring, driving fears of higher food price inflation.

America's worst drought for half a century has sent the price of agricultural commodities soaring, driving fears of higher food price inflation. The country is one of the world's largest exporters of corn. Scorching weather in the midwest has damaged harvests, leading to a record rise in prices amid fears of shortages. Corn is trading at $8 a bushel, while Goldman Sachs forecasts it will hit $9 within three months. Meanwhile, benchmark soya bean prices reached a peak of more than $17.

To make matters worse, America isn't the only country in trouble. Concerns about dry crop conditions and reduced production are also mounting in other parts of the world. In Brazil and Argentina, water shortages have hit soya bean output. Heatwaves in southern Europe are damaging corn yields in a region that accounts for 16% of global exports. In India, a delayed monsoon season has affected the lentil, rice and oilseed harvest, and in Australia crops are enduring below-average rainfall.

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