Price of corn falls by 25%

Saturday 02 July 2011 00:00 BST
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Corn prices have fallen sharply in recent days after news that US farmers had planted near-record quantities of the staple.

The benchmark price in Chicago – which was at a record $8 (£5) a bushel last month – fell to under $6 a bushel yesterday. Commodity experts at Goldman Sachs meanwhile slashed their forecast for corn and wheat prices by 26 per cent.

The US Department of Agriculture said America's farmers had planted 92.3 million acres of corn this year, the second-highest figure since 1944. Much of this has been at the expense of soya.

Recent record harvests in southern Africa have also helped calm fears about further jumps in food prices, at least in the short to medium term.

Lower corn costs will help livestock farmers faced with high feed prices, and generally ease one of the main drivers of global inflation. The easing in food price inflation will reduce the pressure on household budgets in the world's poorest nations.

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