Crop Prices Soar Through The Roof To Highest Increase In 14 Years As Iran, Ukraine Wars Rage On
Agricultural commodity rose to their highest rate in more than a decade in August as wars and extreme weather threatened supplies, raising concerns that higher costs would hit American consumers already rocked by inflation.
Agricultural commodity rose to their highest rate in more than a decade in August as wars and extreme weather threatened supplies, raising concerns that higher costs would hit American consumers already rocked by inflation.
The Bloomberg Agriculture Spot Index, which tracks ten major agricultural commodities, climbed more than 13% in August through Friday, putting it on pace for its largest monthly gain since July 2012. Higher commodity prices can take time to reach grocery store shelves, but the increases are occurring alongside elevated energy and transportation costs tied to the war in Iran, potentially adding pressure to the prices of everyday staples such as bread, meat and dairy.
Wheat was one of the index’s biggest drivers, with prices recently reaching a three-year high as attacks on Black Sea ports during the Ukraine war disrupted shipments from one of the world’s most important grain-producing regions, Bloomberg reported. Sugar and cocoa prices also surged roughly 20% in August as weather concerns intensified.
Russia and Ukraine together accounted for more than one-quarter of global wheat exports, in addition to supplying significant quantities of barley, corn and sunflower oil. Grain shipments slowed as the two sides attacked each other’s vessels and ports during the Ukraine war, while Russia was preparing to intensify its attacks after negotiations over a potential peace agreement stalled.
The disruptions left the global market with few obvious alternatives, according to Lachstock Consulting.
“Unless Black Sea exports begin flowing again, the market increasingly looks to be dealing with a multi-season supply issue rather than a short-term logistics problem,” Lachstock said in a Monday note.
The supply concerns extended beyond wheat. Summer heat waves