The specialist food and agribusiness bank predicts that global prices of key food staples — sugar, coffee, corn and soybeans — will fall as production has some time to adjust to higher prices, bringing down costs for buyers and in some cases for consumers too.
Despite relief on prices and availability, the bank still predicts demand to remain weak as consumers continue to deal with economic challenges, including high inflation and interest rates.
Rabobank expects weak global economic growth in 2024 to limit the growth in agricultural commodity demand.
“Describing the last three years of global agricultural commodity prices as volatile is an understatement,” Carlos Mera, head of agri commodities at Rabobank, said.
“Producers are still grappling with the after effects of war, adverse weather, high farm input inflation and weak consumer demand, but eyeing 2024 as the return to a semblance of normality.”
Wheat will be subject to weather-related disruptions and potential restrictions on Black Sea exports, despite large volumes being produced and in storage in the region.
Rabobank expects another deficit in the global wheat market, the fifth in a row.
There will be little relief from the Southern Hemisphere crops in the coming months, with both Argentina underperforming and Australia falling well behind the past three years’ very good crops.
RaboResearch Australia & New Zealand general manager Stefan Vogel said Australian wheat receives some price support from drier weather conditions locally — keeping prices on the country’s east coast above the US CBOT price, the global benchmark.
Mr Vogel also said Australian canola producers would have to look closely at three major price drivers in 2024.
“Global supplies of canola are likely to recover due to strong Ukrainian plantings and the dry spell in Canada, the world’s largest canola exporter, will likely end,” he said.
“El Niño might push palm oil supplies short of expectations and support prices. And lastly, demand for vegetable oils will continue to grow exponentially in 2024 with the US biofuel sector consuming even more.”
Mr Mera said it won’t be “plain sailing” but the more positive outlook for the majority of agri commodities should lead to relief for buyers around the world.
“Governments, businesses, farmers and consumers will all feel beleaguered after a volatile few years,” he said.
“Now’s not the time to toast a recovery, but the outlook for inflation in agricultural commodities is far more positive than in previous years”.
