Skyrocketing agricultural commodity prices are causing the world to re-enter a period of “agflation” with food prices forecast to reach record highs in 2013 and continue to rise well into the third quarter of 2013, says a new report, Agflation, from Rabobank’s Food & Agribusiness Research and Advisory group.
“The impact on the poorest consumers should be reduced this time around, as purchasers are able to switch consumption from animal protein back towards staple grains like rice and wheat,” says Luke Chandler, global head of agri commodity markets research at Rabobank. “These commodities are currently 30 percent cheaper than their 2008 peaks. Nonetheless, price rises are likely to stall the long-term trend towards higher-protein diets in Asia, the Middle East and North Africa. In developed economies—especially the US and Europe—where meat and corn price elasticity is low, the ‘knock-on effect’ of high grain prices will be felt for some time to come.”