This is unprecedented since 2014: food prices are skyrocketing, especially for grains. The reason ? Over the past year, cereal prices increased by 50% for corn, wheat and soybeans and by 27% for rice.
After seven years of decline, we are now witnessing the reactivation of agricultural prices. There are different reasons for this phenomenon. Is first the epidemic that changed the mindset of certain countries that now wish to ensure their food independence by making preventive reserves. Even exporting countries like Russia have started to restrict exports.
The shortage of maritime transport capacities also explains this rise in prices because freight cost it doubled and there was a shortage of containers. But the main driver of the increase is purchases from China, which have been massive this year. Traditionally, the most consumed cereal has been rice. Today, the country is diversifying and bread is entering the Chinese market. So, faced with the demand, China is appealing to import of wheat.
Will there be any consequences for consumer prices? At the moment the great distribution prevents it, but there will be long-term consequences. The risk is more related to poor countries. In any case it is the fear ofFood and Agriculture Organization of the United Nations who fears a “Covid shock” which would translate into a sharp increase in consumer prices, with all the social and political consequences that this may entail.
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