Geopolitical tensions, rising input costs and tighter supplies expected to drive grain and oilseed prices higher over the next 12-18 months.
A combination of geopolitical instability, rising input costs and shifting supply dynamics is pushing global grain markets into a new and more volatile era, according to veteran market analyst Jerry Klassen.
Speaking at last week’s United Potato Partners meeting in Portage la Prairie, Man., the owner of Resilient Commodity Analysis told attendees that the conditions shaping agriculture today are fundamentally different from those of the past decade.
“We’re entering a new period, or a new phase in grain trading and grain merchandising,” he said. “We’re probably going to see higher prices for grains and oilseeds.”
Klassen, who has more than 25 years of experience in commodity trading and market analysis, said conversations with global industry contacts, from Europe to Southeast Asia, point to sustained upward pressure on agricultural markets.
“There is potential for significantly higher prices given all the risks that are occurring in the world,” he added.
Geopolitics reshaping trade flows
A key theme of Klassen’s presentation was the growing influence of geopolitical conflict on agricultural markets.
He cited tensions in the Middle East, the ongoing war involving Russia — currently the world’s largest wheat exporter — and military pressures in Asia as factors contributing to uncertainty in global trade.
“These are all consequences that are changing the landscape for grain merchandising and increasing the risks,” Klassen said.
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