Saturday 15th May 2021
“Historical price spikes”
Many foods could become more expensive
The prices of grain on the world market are skyrocketing. Experts fear that the historic increase will soon also be reflected in domestic supermarkets. Meat in particular should then cost noticeably more. Because several problems are currently coming together.
Grain experts observe “sometimes historical price fluctuations” for grain, maize and oilseeds such as rapeseed – possibly with consequences for consumers. “If the prices for vegetable oils and grains stay that way for a while, then that will certainly be reflected in the food prices in the supermarket within a few months,” said Thorsten Tiedemann, Chairman of the Board of the Association of Grain Traders at the Hamburg Stock Exchange.
It is true that raw material prices for baked goods only have a small share in the sales price. “But meat production will certainly become more expensive with feed,” said Tiedemann. In his opinion, the world market trend should also have an impact on consumer prices for products such as flour and vegetable oil.
The World Food Organization (FAO) has been observing rising prices for practically all agricultural commodities for some time. The bottom line was that FAO food price index according to the latest data in April 31 percent above the previous year’s figure, after eleven monthly increases in a row, the highest level has been reached in seven years. The trend is particularly pronounced for oilseeds, where the price level has now doubled compared to April 2020.
Corona bottlenecks are noticeable
From the FAO’s point of view, this development is also fueled by the demand from manufacturers of biofuels. “It has long been expected that something will happen in the prices due to the high liquidity and also partly due to the bottlenecks that arise in the economy due to corona restrictions,” said Tiedemann. After a “very comfortable supply and demand situation in the grain and oilseed market”, “a few poor harvests with an accompanying reduction in stocks” have now caused something to go awry “.
In addition, demand is picking up in regions with stronger growth after the Corona recession. “Then there are a few more weather reports, in Brazil we are looking at a relatively bad harvest, and then of course the markets will go up very strongly.”
Tiedemann expressed concern that Germany’s self-sufficiency in agricultural raw materials was declining. In the grain marketing year, Germany had a net export of around two million tons. “That’s not even five percent of the total grain production that we have left over here.” In previous years, “seven to ten million tonnes net” were exported.
The Port of Hamburg is the central hub for the grain trade in Northern Europe. The Association of Grain Traders has seen itself as the official mouthpiece of the international trade in grain, oilseeds, animal feed, pulses, fish meal and edible seeds for over 150 years.
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