A perfect storm of drought, floods and low stocks is sending the price of wheat rising to record levels on global commodity markets.

Last week, the price soared on the Chicago Board of Trade to $8 a bushel, boosted by a spate of big market purchases by India, Egypt and Korea.

India had warned earlier this year of a tender for almost 500,000 tonnes but the government this week signalled that it would be taking 795,000 tonnes.

The aggressive market intervention from a country that was until last year a net exporter of grain reflects mounting concern that global stocks of wheat are dwindling as the world demands greater supplies.

According to the International Grain Council, wheat stocks are at their lowest level for 25 years and exports from the big five wheat producers — the EU, the US, Australia, Canada and Argentina have halved in three years.

Consumption is rising in Asia as prosperity increases and diets shift from vegetables to meat, adding to the pressure on feed wheat markets.

At the same time, grains are in demand for the production of biofuels as governments impose stiff biofuel targets on road fuels.

The sudden price surge is good news for farmers and will stimulate more planting and bigger harvests in the future but it will add to inflationary worries among consumers and governments.

The basic ingredients of prosperity in developed countries — cheap food and cheap fuel — are no longer guaranteed.

It is hardly surprising that in countries, such as India, where climate change could have a dramatic impact on food production, there are urgent calls to stockpile grain ahead of the next harvest.

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