Rabobank tips global food prices to soar by mid-2013
Skyrocketing agricultural commodity prices are causing the world to re-enter a period of “agflation”, with global food prices forecast to reach record highs in 2013, international agribusiness bank Rabobank says.
This year's grain shortage would affect feed-intensive crops with global repercussions for the animal protein and dairy industries, the bank's global head of agri-commodity markets research, Luke Chandler, said.
Current price inflation was the result of weather-driven events in large exporting nations, mainly the severe drought in the United States, its worst since 1936, and water shortages in Russia and South America.
“This rally in grain and oilseed prices will have a significant knock-on effect on other food and agriculture supply chains especially the animal protein industry, resulting in rising meat prices."
Rabobank estimated the Food and Agricultural Organisation (FAO) food price index would rise by 15 per cent by the end of June 2013 with prices, particularly for grains and oilseeds, to remain at elevated levels for at least the next 12 months.
Stockpiling and export bans were a distinct possibility but could be counter-productive globally.