Grain prices will continue to increase in 2023 because risks in the geopolitical context, in the energy sector and fertilizer prices are high, projected the French credit insurer Coface.

So it can be said that the entire value chain will continue to be affected in 2023.

The war in Ukraine is causing an increase in inflation that has impacted fertilizer and fungicide prices, which in turn affect production costs in the field and throughout the value chain.

Coface’s assessment of the agri-food sector is high risk for Latin America, the Middle East and Eastern Europe, while Asia-Pacific and North America are medium risk.

According to Patricia Krause and Simon Lacoume, Coface analysts, the El Niño phenomenon is probably starting, as the La Niña phenomenon will end between March and April 2023, which will bring a drier and warmer climate in the Pacific Ocean belt and may affect sugar cane production.

While corn and cereals will foreseeably be high in their prices in 2023, sugar will be impacted by the El Niño phenomenon and production will be affected.

At the same time, due to weather effects in 2023, wheat production will not be as good and will probably also be affected by heat waves.

With the entry of the El Niño phenomenon in the Pacific region, analysts expect a difficult situation for the agri-food sector globally.

Grain prices

Food inflation has moderated at the margin, but remains at historically high levels, limiting household purchasing power.

While food consumption is more resilient to economic downturns, consumers must substitute or replace certain foods with cheaper ones.

In Argentina, imbalances are accumulating; in Brazil, the forecast is positive for the current harvest; soybeans, corn and sugar cane will recover.

While Chile is going through 14 years of drought in the sector, although the arrival of El Niño may increase humidity, in Colombia production is expected to recover after excessive rains.

In Mexico, the forecast for agricultural production growth in 2023 is maintained, despite the drought in 48.6% of the municipalities.