Conflict and weather conditions pushed agricultural prices to their biggest monthly increase in 14 years in August. According to the Bloomberg Agriculture Spot Index, which tracks 10 major agricultural and food commodities, those prices rose 13% last month to $434.
Wheat is a key growth driver, with prices recently hitting a three-year high due to the situation at Black Sea ports, according to a report. At the end of August, the price of a bushel of wheat (27.2 kg) rose to $7.79, the highest since February 2023.
“If exports from the Black Sea basin do not resume, the market will increasingly face a multi-seasonal supply problem rather than a short-term logistical challenge“, notes a report by Lachstock Consulting, an analytical and advisory firm. “The quality of Argentine wheat is questionable, Canada has constraints, Australia has export capacity constraints, and America is increasingly becoming a more expensive supplier of leftover products“, the report says.
Bloomberg points to bad weather due to climate change as another problem: a summer heat wave has damaged corn crops in the United States and Europe. The natural phenomenon El Niño, which affects global climate, will pose additional risks to next year's harvest, including cocoa bean production.