Bloomberg reports that staple crops — corn, wheat, soybeans, and vegetable oils — are "dramatically more expensive, flashing alarm signals for global shopping budgets." This is especially alarming for poorer countries, where groceries account for a large percentage of people's income.
The most recent crop spikes follow months of price gains fueled by booming import demand from China. Corn prices have doubled in the past year, while soybeans are up about 80% and wheat 30%. With China's purchases continuing and a spate of adverse weather conditions threatening crops in Brazil and the U.S., there are few signs of respite. Analysts including those at Rabobank, Mintec and HSBC Global Research all see a risk of even higher prices as a result, though it will vary across markets.
The impact on grocery shelves can already be seen in surging tortilla prices in Mexico, beef in Brazil and retail palm oil in Myanmar. In the U.S., it's more expensive bacon and other meat cuts.
"Generally people see this inflation continuing," said Tosin Jack, an analyst at Mintec, which monitors commodity prices. "The trend will continue for some time and it will translate into consumer goods."