Rabobank: world food prices will begin to decline in 2024

However, the bank warns that demand will still remain weak due to economic challenges including high inflation and interest rates. Rabobank also expects weak global economic growth in 2024 to limit demand for agricultural products. Uncertainty also remains in other key agricultural markets, such as the wheat market, which is experiencing disruptions due to weather conditions and potential restrictions on exports from the Black Sea region. Rabobank predicts another deficit in the world wheat market, the fifth in a row.

At the same time, analysts expect a resumption of global rapeseed supplies against the backdrop of high plantings in Ukraine and the end of the drought in CANADA. However, palm oil prices may remain high due to El Niño, while demand for vegetable oils will continue to grow exponentially. SUGAR prices hit a 12-year high in 2023 due to poor harvests in Thailand and India, but Rabobank expects a return to more normal conditions in Thailand in 2024-25, which could lead to further price declines  .

DIRECTOR of the Center for Agricultural Policy of RANEPA Natalya Shagaida said that nominal food prices began to rise from the beginning of the summer of 2020, reaching abnormal values ​​in March 2022: if in May 2020 the UN FAO food price index was 91%, then in March 2022 - at 160%. Cereal price indices over this period increased from 98% to 173.5%. Since March 2022, prices began to fall. In October 2023, the indices reached 120.6% for food and 125% for grains. Wheat prices are also declining, and there is strong competition between exporters.

RUSSIA is integrated into the world market , all this is reflected on it even without taking into account the special situation of the region from which the main exports come , the expert noted. According to FAS USDA estimates, global wheat production in the 2023/24 season will decrease compared to the previous season, while consumption will remain approximately at the same level. However, inventories are forecast to make up the shortfall, although they remain at their lowest levels since 2015-16. Prices have not yet returned to pre-crisis levels; among the main products, concerns arise for sugar due to the difficult conditions of the current year, Shagaida added.

According to the UN FAO, in October the world food price index decreased by 10.9% compared to the same month last year, and by 0.5% compared to September. The price index for grains decreased by 1%, and for vegetable oils it decreased by 0.7%. However, the dairy price index rose 2.2% after nine months of decline. The annual decline in price indices amounted to 17.9% for grains, 20.7% for vegetable oils and 20.1% for dairy products.