With the start of 2024, commodity markets remain relatively calm, at least compared to the recent past. According to AMIS’ Market Monitor report, export prices for wheat, corn and soya beans have reached their lowest levels in two years. Rice prices continue to be the exception.
It is almost a third higher than a year ago, due to production deficits caused by El Nio and India’s ongoing export restrictions. Markets will monitor the development of Brazil’s soya bean production, which is under some stress due to below-normal rainfall. However, the potential for critical geopolitical situations looms large.
Transport disruptions in the Panama Canal, Red Sea and many inland waterways could threaten established trade routes and alter the competitiveness of different origins, with implications for 2024 crop planting intentions. While the competitiveness of the Black Sea and other European origins to destinations in Asia could be eroded by higher transport costs, evolution could be beneficial for producers in the Americas. Higher transport costs will affect food import bills and subsequently retail prices, but these may not necessarily translate into higher consumer prices. Lower FOB and farmgate prices could offset some of the increases in transport costs.
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