FOOD COMMODITY PRICES EXPECTED TO EASE IN 2024
Global food commodity prices are expected to retreat from record highs in 2024 following three years of turbulence caused by war, weather, and escalating energy and input costs, according to Rabobank’s annual Agri Commodity Markets Outlook report. Prices of key agricultural commodities corn, soybeans, sugar, and coffee will ease as production has time to adapt to high prices and demand remains weak. Wheat will remain subject to weather and export-related uncertainty. Bakery, dairy, and animal protein producers are set to be the biggest beneficiaries of a slowdown in input costs.
Brazilian farmers are expecting to see a record soybean crop in 2024 as La Niña weather gives way to El Niño, a bumper 163 million tonnes crop haul. Argentina also is expected to recover after last year’s harvest failure, boosting global stockpiles, although it will be subject to an uncertain foreign currency exchange policy. For wheat, Rabobank expects another deficit in the global market, the fifth in a row. There will be little relief from the Southern Hemisphere crops in the coming months, with both Argentina and Australia underperforming. Russia’s 2024 harvest likely will stay above 87 million tonnes, but any expectation is subject to weather uncertainty and export restrictions. Wheat prices have declined about 27% since the start of 2023, according to Rabobank.
Corn demand’s rebound from last year’s rationing has been strengthened by discounts, but consumers still face economic headwinds, the report noted. Farmers are well capitalized after years of positive returns but undersold, and a lack of storage space, especially in Brazil, will pressure them to sell some corn at cost, according to the report.
(Link: WorldGrain)
