Agricultural prices climbed 20% on a year to a 7-year high. On the only 1is quarter of 2021, the World Bank’s Agricultural Price Index climbed more than 9%. The largest increase was in cereals followed by oils and strawberries. Prices supported by falls in the supply of certain commodities, in particular corn and soybeans, strong demand from China and the weak dollar.
Almost all commodity prices increased in the 1st quarter of the year, and most are now above pre-pandemic levels. The gains were driven by the recovery in global economic activity, as well as some specific supply factors, particularly for oil, copper and some food products.
While the debate is established on the possibility of a new bull cycle of raw materials, the World Bank seems to be leaning for a temporary increase but which should settle in the whole of 2021 and then have a stabilization of prices. in 2022. “Agricultural commodity prices have risen steadily this year, especially for food products, due to insufficient supply in South America and strong demand from China. However, supply is sufficient for most global food markets by historical levels, and prices are expected to stabilize in 2022. “” Says the World Bank.
Agricultural prices are expected to stabilize in 2022 after increasing 14% this year.
Plus 25% for cereals in one year
The World Bank’s grain price index climbed 17% in the 1is quarter 2021 and 25% over one year. A progress which caused a sharp rise in the prices of foodstuffs. At the heart of the increase, corn, up 25% at 1is quarter, but also wheat and rice each with an increase of 10%.
Oilseeds at the highest of nearly 9 years
If the price index for oilseeds and cakes has increased “only” by 12% to 1is quarter 2021, it increased by 46% over the year. Soybean prices were on average 58% higher in March due to production shortfalls in South America linked to La Niña, while palm oil prices were on average 62% higher due to the bad weather in Southeast Asia.
Stability for cocoa, coffee and tea
The World Bank’s beverage price index was broadly stable in the first quarter of 2021, but is almost 6% higher than a year ago. Movements in the index reflect a strengthening in the price of Arabica coffee and, to a lesser extent, gains in Robusta and tea – although the latter has been the most volatile. The index is expected to post small gains in 2021 and 2022. Apart from a brief rise in November, cocoa prices have been broadly stable over the past eight months, observes the Bank.
Cotton good
The World Bank’s commodity price index rose 4% in the first quarter of 2021, driven by a sharp rise in cotton prices. Indeed, after a strong gain in the fourth quarter of 20220, cotton prices jumped 16% in the 1is trimester. Although prices fell in April, they are still 40% higher than their April 2020 low, the World Bank says. An increase that reflects a recovery in global consumption, particularly in China (+ 12%) and India (+ 22%) and narrow supply. The World Bank estimates that Cotton prices are expected to be on average 23% higher in 2021, compared to 2020, followed by a slight increase in 2022.
As for natural rubber, prices rose 3% in the 1is quarter 2021 compared to 4th trimester. The World Bank estimates that prices should appreciate by 30% in 2021 compared to 2020 and then stabilize in 2022.
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