Surging food prices have taken center stage with policy makers, especially in commodities-dependent nations like China and India -- home to one-third of the world's population. Both countries have raised interest rates in a bid to rein in inflation.
Some analysts believe monetary tightening could reduce demand for commodities as the cost of capital rises, but others say importing countries, especially China and India, need to keep buying for consumption and reserves.
"As food inflation becomes a bigger issue in the lesser-developed countries, the global pipeline for food commodities is expanding. The world wants to own a little more inventory," said grains analyst Terry Roggensack of The Hightower Report in Chicago.
For North African countries like Algeria, the rush to import grains, particularly in the past two weeks, has been fueled by concerns about how to reduce populist anger over rising food costs that has led to riots.
With the stepped-up demand from North Africa and the Middle East whittling away at global wheat stocks, there is no room for error with the winter wheat crop in the United States that was planted last fall and will be harvested in the summer. the same goes for the wheat crops in China -- the world's largest grower.
"We are not in a good situation going into February and March in China and in the U.S., so wheat is on the verge of a real scare," Roggensack said.
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