Will the recession collapse the price of food in 2023 or not?
2022.11.16 09:02
Will the recession collapse the price of food in 2023 or not?
Budrigannews.com – Agricultural prices, such as coffee, forage grains and oilseeds, could fall next year as many major economies enter recession, but will remain historically high, Rabobank said.
Consumers are facing gloomy macroeconomic conditions, including energy shortages, geopolitical dangers and an ongoing shortage of key commodities such as wheat, which is inconvenient for global food security, the bank said.
Wheat, which has been badly affected by the war between Russia and Ukraine, expects a deficit of 6 million tons next year, thanks to uncertain climate prospects in the European Union, the United States and Argentina.
Elsewhere, Rabobank sees demand for coffee growing well below average levels at 1.5%, and benign weather has left the market with a surplus of 4 million bags. He sees relatively low sugar prices, but again largely thanks to a benign climate.
“Agricultural prices could (still) recede,” said Carlos Mera, the bank’s head of agricultural market research.This is not because production improves significantly, but because demand is very weak,” he said.
With rising energy, labor and other costs, agricultural prices are about 50 percent higher than in the pre-pandemic era, the bank noted.
