Wheat Rally Will Raise Deficits in North Africa, Iran, FAO Says

Higher wheat prices will raise budget deficits in North Africa and Iran because of spending on bread subsidies, said Abdolreza Abbassian, senior grains economist at the Food and Agriculture Organization.

All of the North African countries on the Mediterranean Sea as well as Iran provide some sort of subsidy on bread, meaning household food budgets will be shielded from higher prices for now, Abbassian said yesterday. Wheat futures have risen 49 percent in Paris since June as drought damaged crops in Russia, a supplier to North Africa.