Food price inflation is set to fall sharply after large price rises for consumers in recent years, according to a major lender to agribusinesses, as production of agricultural commodities ramps up and demand is damped by weak economic growth.
Rabobank, a specialist food and agribusiness bank, said in its annual outlook for 2024 that overall food price inflation will be dragged down by falling prices of key food staples such as sugar, coffee, corn and soyabeans as growers increase production in response to high prices. Demand, meanwhile, is set to decline as consumers struggle with the effects of high interest rates and inflation.
The drop in the cost of some commodities will potentially boost profits for the dairy, bakery and meat sectors, the Netherlands-based bank said on Wednesday.