High food prices in recent years have prompted farmers around the world to grow more grains and oilseeds, but consumers may face reduced supplies in 2024 amid unfavorable weather caused by the El Niño natural phenomenon, export restrictions and higher biofuel requirements, Reuters reports.
As noted, world prices for wheat, corn and soybeans, after several years of significant growth, are declining in 2023 due to improved shipping in the Black Sea and fears of a global recession, although they will still remain vulnerable to changes in supply and food inflation in the new year.
The El Niño weather phenomenon is projected to continue in the first half of 2024, jeopardizing supplies of rice, wheat, palm oil, and other agricultural products in some of the world’s leading exporters and importers.
According to Commerzbank experts, the situation with wheat supply in the second half of 2023/24 MY is likely to deteriorate compared to the previous season due to lower shipments from key exporting countries.
At the same time, production of corn, wheat and soybeans in South America is expected to improve in 2024, although unstable weather in Brazil raises some doubts about this.
Global palm oil production is also likely to decline next year amid dry weather due to El Niño, which will support prices for the product, which fell by more than 10% in 2023. The decline in production comes amid expectations of higher demand for biodiesel production.
“So, to summarize, global stocks of grains and oilseeds will decline, the Northern Hemisphere is likely to experience a strong El Niño natural phenomenon during the growing season for the first time since 2015, the US dollar will continue to decline against world currencies, and global food demand should return to a long-term upward trend,” the report concludes.
Source: Apkinform