Prices of major agricultural commodities have risen sharply on international exchanges this year. Wheat is up by 44%, rice - 63%, soybeans - 26%, oats - 25%, while sugar and corn have increased by nearly 20% each.
The rise is driven by several factors, with higher energy costs among the main ones. Oil prices have increased by 80% and natural gas by 200%, raising transportation, agricultural machinery and fertilizer production costs. Conflicts in the Black Sea region, export restrictions and disruptions in the Red Sea have also increased shipping costs, insurance premiums and supply risks.
Supply-side pressures are adding to the increase. Droughts linked to El Niño have reduced sugarcane yields in India and Brazil, while adverse weather has lowered wheat harvest forecasts in major exporting countries. Prolonged drought has also affected cocoa production. The FAO Food Price Index has reached a new record high, indicating that global food prices remain under significant pressure.
Speculative trading is also contributing to the surge. Hedge funds and traders have increased purchases of commodity futures, accelerating price growth as speculative investors join producers and consumers in the market.
