Agri-commodity prices to ease as growth slows, but upward pressure remains amid macro woes

THE pace of increases in the prices of most agricultural commodities should slow in 2023, due to a higher base effect and a slowing global economy. But market watchers said prices are likely to remain high by historical standards, given macroeconomic uncertainty.

A combination of the Russia-Ukraine war, higher demand and tight supply due to weather conditions pushed prices of several agri-commodities to multi-year highs in 2022, although some have since pared earlier gains.

Wheat prices, for instance, spiked following Russia’s invasion of Ukraine in February. The two countries are among the world’s major exporters of wheat. Other agriculture products affected by the invasion were fertiliser and corn.