Agricultural markets ‘undervaluing risk’, says Rabobank

By Caroline Scott-Thomas

- Last updated on GMT

Agricultural markets ‘undervaluing risk’, says Rabobank

Related tags Supply and demand

The supply and demand balance remains highly uncertain for most agri-commodities – but this is not reflected in futures prices, according to a new report from Rabobank.

The financial services firm says that stimulus packages worldwide have increased liquidity and optimism in the sector. However, record-low stock levels – particularly for oilseeds and grains – mean that the market is still at risk of price volatility in the year ahead.

“Agricultural markets appear to be undervaluing risk, with stock levels reduced and the production outlook uncertain while price volatility has fallen to multi-year lows,”​ Rabobank said in its latest monthly agri-commodities report​.

“Longer term volatility in agricultural markets is also on the rise as the world’s incremental demand growth is being met by less reliable production regions,” ​it said.

World grain markets are relying more on supplies from the region around the Black Sea and South America, which also tend to have the most volatile weather, it said.

For sugar, the market is fundamentally oversupplied, according to the report, although Rabobank’s economists predict that market concerns will restrict prices from falling below about $0.18 per pound.

“Both short and long term trends suggest markets are failing to accurately reflect likely volatility in agri markets,”​ it said.

The full report is available online here​.

Related news

Related products

show more

Healthy, delicious and sustainable

Healthy, delicious and sustainable

Döhler – Natural Food & Beverage Ingredients | 02-Nov-2022 | Technical / White Paper

Develop innovative, plant-based dairy applications to meet the growing demands of consumers around the world! We understand the individual challenges of...

Extend the shelf life of frying oils, naturally

Extend the shelf life of frying oils, naturally

Mane Kancor Ingredients Pvt. Ltd. | 28-Oct-2022 | Technical / White Paper

Frying oils when exposed to extrinsic factors like high temperature, oxygen, moisture, etc. undergo accelerated oxidation leading to faster onset of rancidity....

Related suppliers

Follow us


View more