Grains and oilseeds will lead the surge, with annual average price increases of 16%

By: trademagazin Date: 2007. 08. 10. 00:00

Surging demand for food, feed and fuels are combining with low stock levels to create extremely tight markets.

Global agricultural commodity prices are booming. Prices, as
indicated by the Economist Intelligence Unit's food, feedstuffs and beverages
(FFB) index, are on course to rise by 16% this year—repeating the strong
performance of 2006.. And unfavourable weather conditions, combined with
competition for acreage, imply that it will take some time still before supply
manages to catch up with demand. The FFB index will thus rise by a further 2% a
year in 2008-09, suggesting the commodity-wide price boom is far from over.
Grains and oilseeds will lead the surge, with annual average
price increases of 16% and 29%, respectively, expected this year. The EIU's
latest market assessments point to both markets remaining in deficit until at
least 2009, implying further upward price pressure. Prices for both markets are
set to rise by 5% in 2008.

 

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