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Global food prices seem to have ameliorated across the board as plentiful harvests in most sectors have apparently reassured investors. Corn, wheat and soy prices have descended substantially from their peaks in March. The exception to this rule is the rice market, which is waiting for the fall harvest before projections can be clearly made. Continuing government restrictions on trade movements of rice in South Asia and uncertainties about the U.S. harvest are likely behind this price surge.
But it appears unlikely at this point that prices will return to the lows of the past several years. While the extreme spikes felt through 2008 might have eased for now, rising global wealth and population has put pressure on food stocks. Furthermore, the ability of countries to expand their production levels is limited — particularly in the case of rice — and the infrastructural adjustments necessary for revamping the global agriculture industry can take time. We do not yet understand how commodities will be affected by the global credit tightening, or by an uneasy investment market in the wake of the ongoing U.S. financial crisis.
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