Global food commodity prices are expected to fall from historic highs in 2024, after three years of turmoil caused by war, weather and escalating energy and input costs, according to the annual report Rabobank’s Agri Commodity Markets Outlook.
With lower prices for agricultural raw materials, one of the main drivers of food price inflation is expected to ease. Despite the relief in prices and availability, Rabobank still predicts that demand will remain weak as consumers continue to deal with economic challenges, including inflation and high interest rates. Rabobank expects weak economic growth in 2024 to limit growth in demand for agricultural products.
“To describe the last three years of global agricultural commodity prices as volatile is an understatement,” said Carlos Mera, head of agricultural commodities at Rabobank. “Producers are still struggling with the effects of war, adverse weather conditions, high inflation of agricultural inputs and weak consumer demand, but they see 2024 as a return to a semblance of normality.”
Rabobank’s Outlook report assesses the prospects for a basket of agricultural products that are crucial to the global economy based on “base case”, “high case” and “low case” scenarios. It tracks the outlook for 10 key agricultural commodities in the coming year.
Rabobank predicts that prices for key agricultural products, corn, soybeans, sugar and coffee, will decline as production has time to adapt to high prices and demand remains weak. Wheat will continue to be subject to climate and export-related uncertainties. Bakery, dairy and animal protein producers are expected to be the biggest beneficiaries of a slowdown in input costs.
“Winners and losers will emerge as agricultural commodities move through different points in the cycle next year,” Mera said. “We anticipate the bakery, dairy and animal protein sectors will be the biggest beneficiaries as the South American market returns to a healthier position and increases supply.”