Crop Prices Soar Amidst Wars and Weather Disruptions
Crop prices have surged to their biggest monthly gain in over a decade due to wars and extreme weather disrupting supplies. The Bloomberg Agriculture Spot Index, which tracks 10 major products, rose more than 13% in August, its steepest gain since July 2012.
The price of wheat has reached a three-year high after attacks on Black Sea ports cut shipments from a major growing region. Sugar and cocoa prices have also risen by over 20% as the El Niño weather phenomenon fuels concerns about crop development in West Africa.
Experts warn that it may take time for pricier crops to filter through to supermarket shelves, but the gains come on top of rising energy and transport costs driven by the war in Iran. Turkey is working towards a Black Sea deal, which could help ease some of the pressure on wheat prices.
Poor weather has also impacted US and European corn harvests, while a powerful El Niño is expected to pose further risks to crops into next year. The government of India recently allowed duty-free imports in an effort to curb sugar prices, which have risen by over 20% in August.