DUBLIN–(BUSINESS WIRE)–The “World Commodity Forecasts Food Feedstuffs and Beverages” report has been added to ResearchAndMarkets.com’s offering.
The Economist Intelligence Unit expects its food, feedstuffs and beverages (FFB) price index to increase by 25% in 2021, owing to the huge rise in prices of grains, oilseeds and sugar.
Demand for livestock feed and a strong stocking cycle has boosted Chinese imports of US wheat and maize. Furthermore, the bilateral trade war between the US and China has disrupted existing trade patterns and caused the prices of some products that are subject to tariffs, including soybeans and soymeal, to diverge in some markets.
A number of other markets, including for grains such as rice, are also beginning to tighten, which will support price growth in this sub-index in 2021. Downside risks to our price forecast related to a potentially disruptive El Niño event will persist.
We forecast that the FFB price index will dip in 2022, by 1.6%. We expect production volumes of agricultural commodities to rise in 2022 as the output and transport disruptions sparked by the coronavirus pandemic begin to ease. The surge in demand sparked by the staggered global economic recovery in 2021 will also begin to stabilise.
Both of these factors will ease most FFB prices back from their 2021 peaks. Nonetheless, in 2022 the FFB price index will remain above the previous five-year average. We expect rising populations to continue to support growth in demand (and therefore prices) in the long term.
We expect grain prices to rise by 25.8% in 2021, extending the recovery of 6.8% recorded in 2020. Maize prices are expected to increase by 35% in 2021 owing to a rise in demand for exports. The recent strong rally in wheat prices ran out of steam in March, with average export prices easing by about 6% compared with the month before, with losses across all leading origins.
As well as spillover from softer maize and soybean markets, weaker wheat prices were also linked to more bearish wheat supply and demand fundamentals. Over the medium term, wheat markets are expected to be underpinned by stronger demand, and we expect prices to rise by 17% in 2021.
Although the overall supply outlook appears fairly comfortable throughout the forecast period, exporter stocks are expected to be tighter than average in the next few years. This could provide limited price support, especially in the event of a severe weather shock.
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