The negative climate in the international capital markets did not seem to affect the agricultural products index which strengthened slightly, while the individual returns of agricultural products presented a mixed picture, as observed by Piraeus Bank in the Monthly Bulletin of Agricultural Product Prices for April. The biggest gains were made by the prices of rice, orange juice and wheat, while significant losses were recorded by the prices of cotton, sugar and to a lesser extent soybeans and cattle.
According to NOAA, forecasts for El-Ninio are estimated to be milder through April-June 2024 (85% probability), with a chance (60%) of La-Ninia developing through June-August 2024, affecting crops of South America, without yet having been discounted to their prices. Signs of normality in the wheat market may reverse due to geopolitical risks, putting its price on an upward trajectory. For sugar, upward pressure on its price as a result of adverse weather conditions is likely, affecting production prospects. “Oversold” levels in the corn price are acting as a support for its price, however reduced Chinese imports are likely to have a negative impact. For orange juice, production cuts are likely to boost its price, but its high valuation level raises concerns about its price trajectory. Increased Indian cotton production is likely to limit the upward trajectory of cotton prices, despite continued Chinese imports. For soybeans, the uncertainty that still exists around global supply levels may have a negative effect on its price. Limited production and export activity may maintain the high level in cattle prices, a trend that is likely to reverse due to the high level of valuation. For rice, the prospects of enhanced Indian rice production may have a negative impact on its price.
On a monthly basis, both the commodity index (+0.61%) and the agricultural products index (+0.64%) moved slightly upward, despite the disappointing data on commodity transactions (significant decline in imports-exports) in China . However, growth-related risks remain to the downside, given geopolitical uncertainty, with the dollar’s positive momentum likely to be maintained, at the same time limiting the upside in agricultural prices.
The Agricultural Product Price Bulletin, which is implemented for the Agricultural Sector of Piraeus Bank by the Economic Analysis & Investment Strategy Unit, is aimed at an extremely wide audience, active in the agri-food sector.
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Tags: Agricultural products Small increase prices April forecasts
