Drought in the U.S. has affected harvests of specialty wheat which is the main ingredient in making cakes and cookies. As a result, the Lunar New year specialties such as pineapple tarts and sponge cakes have become costlier to produce.
As per Bloomberg News, farmers in the USA have reaped 37 % lower soft white wheat in the current season, mainly due to sweltering and in the Pacific Northwest’s dry conditions, where this variety of wheat is grown. The prices have escalated by more than 50% in the last year.
The lower crop yield comes on top of supply chain issues that had caused a spike in food and consumer goods last year, leading to the worst inflation since 1982 in the U.S.
Asian flour millers prize soft white wheat because of its low protein content, which is ideal for cakes, and they are a crucial ingredient for Lunar New year cakes and other celebration items. The light color of the wheat does not change the food appearance, unlike the soft red wheat traded on Chicago’s futures exchange.
Rising wheat
In the Chinatown neighborhood of Chicago, the Chui Quon Bakery has been curtailing its production and increasing prices, the reason being: expensive flowers. The meat used in buns is experiencing inflation, and several other things like winter melon, durian, and red beans are scarce, as per Joyce Chui, the owner. The pandemic and cold winter have resulted in lesser customers and quieter holidays.
The U.S. is a top soft white wheat exporter and sipped nearly 805 of its produce abroad. Asia is the biggest consumer, where rising wealth has boosted demand for rigs variety of wheat, and consumption increases in early February around the Lunar New Year. Confectionary shops and families bake festive soft flour cakes, tarts, and almond cookies.
According to the CEO OF United Grain Corp., Augusto Bassanini, it is not easy to substitute wheat with other products. United Grain operates is one of the largest wheat shippers in the U.S. and operates the grain export elevator in Vancouver, Washington.
According to data by Commodity3, the soft white wheat prices increased from $298 a year ago to $ 454 a ton. The wholesale flour price tracked by the commerce ministry in China has seen a record high. Wheat prices have risen due to tension between major shippers in Ukraine and Russia and have touched the highest since 2012. Chico futures have ended 17 % higher in January than a year ago.
Farmers have increased their crop plantings which can be harvested in six months, to take advantage of higher prices. A farmer in northeastern Oregon, Casey Perkins, has sowed 500 acres of wheat more than the previous year after the last crop was affected. If the weather is typical, it is possible to grow an average crop, and buyers are paying nearly double the price.
