Food Industry Prices in 2024
The global food market has been under the shadow of the coronavirus pandemic and geopolitical tensions. According to the latest reports from financial and economic analysts in London, global food prices are expected to decrease in 2024. Despite the anticipated decrease, prices will still be significantly higher than pre-pandemic levels.
Prices to Moderate Next Year but Remain High
Oxford Economics predicts that in 2024, global food prices could decrease by an average of 4-5 percent. However, this reduction won’t return prices to pre-pandemic levels. Food prices are expected to remain about 45 percent higher compared to 2019. Despite the easing of cost-side pressures, high levels persist, causing concern in global markets.
Impact of Crude Oil and Natural Gas Prices
Crude oil and natural gas prices play a significant role in shaping food prices. While oil prices are expected to decrease in 2024, they will still be about 20 percent higher than in 2019. This upward pressure will be particularly felt in transportation costs. Natural gas prices, crucial for fertilizer production, will also significantly exceed pre-pandemic averages.
European Gas and Fertilizer Prices
European natural gas prices – and consequently, fertilizer prices – are expected to more than double the levels measured in 2019 next year. This is particularly worrisome for agricultural producers and consumers. The American natural gas market’s benchmark, Henry Hub, is also expected to show a significant increase of about 20 percent compared to the 2019 average.
Protectionism and Global Supply Chains
One of the main obstacles to the normalization of global food prices is protectionism. In response to price spikes, many countries introduced export bans or increased tariffs, worsening food supply security. Although the number of such measures has decreased, it is still higher than in 2019. The global rice market has been particularly affected by these steps, which caused a steep supply decline due to the Indian government’s actions.