Global food commodity prices are set for respite in 2024 after three years of record highs caused by war, adverse weather and rising energy and input costs, according to Rabobank’s annual Agri Commodity Markets Outlook report.
The specialist food and agribusiness bank predicts that global prices of key food staples sugar, coffee, corn and soybeans will fall as production has some time to adjust to higher prices, bringing down costs for buyers and in some cases for consumers too.
Despite relief on prices and availability, the bank still predicts demand to remain weak as consumers continue to deal with economic challenges, including high inflation and interest rates. Rabobank expects weak global economic growth in 2024 to limit the growth in agricultural commodity demand.
Uncertainty will also persist in other key agri-commodity markets. Wheat, which the developing world is particularly dependent on, will be subject to weather-related disruptions and potential restrictions on Black Sea exports, despite large volumes being produced and in storage in the region.
Carlos Mera, head of agri commodities at Rabobank, said, “Describing the last three years of global agricultural commodity prices as volatile is an understatement. Producers are still grappling with the after effects of war, adverse weather, high farm input inflation and weak consumer demand, but eyeing 2024 as the return to a semblance of normality.”
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 underperforming and Australia falling well behind the past three years’ very good crops.
RaboResearch Australia & New Zealand general manager Stefan Vogel said Australian wheat receives some price support from drier weather conditions locally – keeping prices on the country’s east coast above the US CBOT price, the global benchmark.
He said, “In Western Australia, basis levels have also improved compared with last year, but WA prices need to be competitive against the likes of Russia given so much of WA’s grain is destined for export markets.”