With food prices on the rise, developing countries are stockpiling staples like wheat and rice in an attempt to stave off social unrest and panic buying—driving prices yet higher. Wheat hit a two-and-a-half-year high yesterday, after Algeria bought 800,000 tons of it and Saudi Arabia announced it was doubling its stockpile, the Financial Times reports. Bangladesh and Indonesia, meanwhile, placed similarly extraordinary rice orders.
“If you look to the average prices from 2000 to 2006, I think we would stay above the levels we observed then,” said the CEO of Cargill, the world’s largest agricultural commodities trader. “Clearly at these prices, the farmers of the world are receiving a price signal to go out and intensify their agriculture.” He adds that any supply disruption, be it weather-related or political, could cause prices to at least temporarily spike to extreme levels.