Food prices are expected to decrease until the end of 2024. Why will this happen?

The increase in food prices worldwide may end this year. According to Oxford Economics, global food prices are expected to ease in 2024, providing some relief to shoppers. The baseline forecast shows that world food commodity prices will register an annual decline this year, reducing pressure on retail food prices.

The main reason for the decline in food commodity prices is the abundant supply of many important crops, especially wheat and corn.

Early harvests in recent months for both major crops led to a continued decline in prices. Wheat futures have fallen almost 10%, while corn futures have lost about 6% over the same period.

Farmers increased production of both wheat and grain corn following higher prices after Russia began its invasion of Ukraine in 2022. Russian wheat exports have also flooded international markets, keeping prices low.

Although wheat and corn prices have seen a sharp decline, rice prices have steadily risen, with global supplies hampered by export restrictions imposed by India, which accounts for about 40% of the world's rice production. Poor harvests in the country last year also pushed prices higher. Unlike the first drop in wheat and corn prices, rice futures have gained over 8% year-to-date.

Global food prices recorded a 9% decline in 2023, according to the World Bank. Similarly, the United Nations food agency's world price index hit a three-year low in February, but saw a slight rebound in March, driven by increases in dairy products, meat and vegetable oils. .

Bad weather has damaged agribusiness confidence and crop prospects, with the price of cocoa recently rising to record levels as West African farmers battle bad weather and disease.