Betting on food prices

America's worst drought in half a century, poor harvests in Russia and Ukraine, and Britain's washout early summer will all push up the costs of basic staple foods such as bread and pasta, while rising animal feed prices will send the price of meat soaring, experts are warning.

Shoppers in the UK are already feeling the pinch, according to mySupermarket.co.uk, which compares prices at major retailers. It said minced beef is up 19 per cent over the past year, while peas, carrots and potatoes are up by 4 per cent to 8 per cent - though some of this is due to seasonal factors. Overall, global food prices rose by 6 per cent in July, says the UN.

America's searing summer, which has seen temperatures hit 43 degrees Celsius day after day, has left the oncerich cornfields of the Midwest brown and shrivelled. The worst-hit farmers are reporting corn harvests of just a tenth of the previous year. It is estimated that, in total, 45 per cent of the corn and 35 per cent of the soya bean crop has been destroyed.

The impact on family budgets, already hit by a steep rise in train fares and near-record petrol prices, could be severe, with economists nervous it will further delay any economic recovery.

But while the crops are withering, speculators are rubbing their hands. At Glencore, the world's biggest commodities trader, the head of its food-trading business said that the US drought will be ''good for Glencore'' because it will lead to opportunities to exploit soaring prices. The Swiss and Jersey-based dealer in wheat, corn, oil and copper, made a profit of US$2.3 billion in the first half of 2012.