In the case of wheat, this assumption has already been confirmed, when its prices have already decreased by almost 10% since the beginning of the year thanks to a rich harvest. Corn futures have weakened by about 6% since the beginning of the year. The corn harvest, which will be evaluated for the entire past year this August, will probably be an absolute record.
Sufficient or even excess production in both cases is related to the growth of their prices after the beginning of Russian aggression in Ukraine in 2022. The increase in market prices has prompted farmers to strive for more production.
According to OE analysts, the pressure on cereals in Russia and Ukraine also eased somewhat. Both countries find a sufficient market for their production.
Wheat, along with corn and rice, generates fully half of global caloric intake. The development of their prices is thus absolutely essential for the general development of food prices. Rice is somewhat “angry” in this regard, as unfavorable weather in key growing areas in India, which generate a full 40% of global production, pushes its prices up consistently. Since the beginning of the year, growth has reached the level of approx. 8%.
According to World Bank analysts, global food prices will fall by 9% in 2023. For this year, the SB estimates a continuation of the decline, in the range of approx. 5.6%. In 2025, food prices should start to rise.
According to OE analysts, the drop in prices could reach its bottom this year, and especially in the second half of the year, prices could begin to rise again. The rise in risks suggests that the subsequent rise in prices could be stronger than initial estimates.
Tags: Oxford Economics Food prices fall year bottom grow year
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