- In 2024, the agricultural sector, which includes food production, arable farming and livestock, faces high prices, limited supply and potential threats to global food security.
- The drought caused by El Niño is threatening important Asian regions, leading to rice shortages and a price increase of up to 45%.
- Contributions from South America are promising, but India could import wheat due to the drought and declining palm oil production could impact prices.
Forecasts for the Year 2024 in the Face of Drought and Rising Food Prices
As 2024 approaches, the global agricultural landscape is preparing for a challenging time. In recent years, high food prices have prompted farmers around the world to increase their grain and oilseed harvests. Despite this response, consumers are likely to face tighter supplies by 2024, influenced by a mix of unfavourable weather conditions, export restrictions and rising demand for biofuels.
El Niño Weather Phenomenon
The El Niño weather phenomenon is a key factor in this equation. Drought is expected to hit key agricultural regions in Asia in the first half of 2024, impacting the production of rice, wheat, palm oil and other crops. This has already led to a shortage in global rice supply and a significant price increase, which can be as high as 45% in some markets.
Challenges for Wheat and Corn Markets
The wheat and maize markets are also facing a number of challenges. Despite a decline in global wheat, corn and soya prices in 2023 due to easing shortages in the Black Sea and fears of recession, the risk of supply shocks and continued food inflation remains. Countries such as India, a major wheat consumer, run the risk of having to import wheat for the first time in years as domestic production stalls due to the drought.
Prospects for South America
On a positive note, South American countries such as Argentina and Brazil are promising to boost global grain supplies. Argentina is expecting a high-yield season for soya beans, maize and wheat thanks to favourable rainfall. In Brazil, record-breaking agricultural production is expected in 2024 despite some weather-related setbacks. However, global production of palm oil, which is essential for cooking oil and biodiesel, is likely to decline due to the drought caused by El Niño, which could impact cooking oil prices.
The agricultural outlook for 2024 is therefore a mixture of cautious optimism and significant challenges. The sector is preparing for a year that will be heavily influenced by weather patterns, export policy and global market demand. This complex interplay will impact production capacity and prices for key agricultural commodities, potentially affecting global food security and economic stability.