Cambiamenti climatici

Why Prices of Pasta and Bread Could Experience a New Surge

Global Alarm on Wheat Prices

Global alarm is sounding once again on wheat prices, potentially causing an increase in the costs of bread and pasta.
Despite inflation showing signs of cooling off, a mix of external factors related to climate change and ongoing conflicts pose a constant threat to global consumers.

Weather Conditions and Conflicts

Extreme weather conditions in various countries and the war in Ukraine risk putting pressure on global wheat supplies and reigniting the specter of rising food costs.
Headwinds are blowing from the Black Sea, Europe, Australia, and the US, alerting to a likely surge in wheat prices for the coming months and years.

Challenges in Wheat Harvest

From waterlogged fields in Western Europe to arid lands in Australia and disrupted supplies in Ukraine due to the war, farmers around the world are facing several setbacks in wheat harvesting.
Global stocks of this crucial agricultural commodity are expected to remain the smallest in almost a decade, according to analysts.

While exceptional yields in the Black Sea region have kept prices in check, concerns about supply are on the rise again.
Futures have bounced to August highs, with funds cutting their bearish bets held for almost two years.

Risks and Implications

“Demand has increased, global stocks remain limited, and new crop issues are intensifying,” said James Bolesworth, CEO of CRM AgriCommodities.
This is worrisome for consumers who had finally found relief from rising food prices, as any prolonged rally could push up bread and pasta costs.

Global Impact

Russia, a major wheat exporter, faces risks due to inadequate moisture for plantations.
The country’s dominance in the market means that any price shocks locally will reverberate across other markets.

In Western Europe, a rainy spring has damaged crop development, affecting the quality of winter crops.
Similarly, Australia faces challenges with dry weather affecting plantations.

In the US, although winter wheat conditions are better than usual, drought remains a concern, impacting spring plantations.

War Factor in Ukraine

The war in Ukraine poses significant challenges to wheat production, with attacks on agricultural infrastructure threatening exports and a lack of manpower due to military service.
Production in the upcoming season could decrease by 6% compared to the previous year.

Author: Hermes A.I.

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