The continuation of the war in Ukraine and the uncertainty about food security keep the rally in the stock prices of agricultural products.
According to the Piraeus Bank Agricultural Product Price Sheet for the month of April, since the beginning of the year the price of wheat has increased by 49.67% (86.15% on an annual basis), of sugar by 11.85% (32 90% per annum), cotton by 32.74% (87.88% per annum), maize by 40.23% (49.51% per annum), orange juice by 30.27% (76% per annum), soybeans by 33.28% (30.02% per year), cattle by 6.62% (28.94% per year) and raw rice by 16.53% (39.28% per year).
The analysts of the Economic Analysis Unit & # 038; Investment Strategy comments that “the continuation of the rise in their prices will depend on the duration of the war, but also on the data that will be formed the day after the war, with signs of de-escalation of prices are not visible at present.” According to the same analysis, “the war in Ukraine led to a further rise in commodity prices for the second consecutive month, as well as international oil prices, in parallel with reports of an embargo on Russian oil by the European countries in the context of existing sanctions.
“The turmoil created by the war in Ukraine in the market of agricultural products kept their prices high, intensifying the dynamics of inflation in April.”
At the same time, meteorological factors affect prices. The National Oceanic and Atmospheric Administration (NOAA) estimates that the La Ninia system may remain in place until August are expected to have a negative impact on the corn and winter wheat growing season in the United States. For cereals (wheat, corn, soybeans), rising prices are likely to continue as a result of the effects of the war and the weather.
Prospects
For sugar, the limited supply may support its price. Concerns about inflation and declining growth are offset by signs that demand for cotton will remain good, boosting its price.
The cattle and orange market will remain tight due to declining output Rising fertilizer prices are challenging the new growing season.
“Investors' attention has been focused on developments in Ukraine, sanctions against Russia and their impact on supply chains. At the same time, investors focused on macroeconomic data, with inflation in the US and the eurozone reaching historically high levels and the majority of forerunners falling, reflecting the effects of the war, “the analysis said.
