The July 2023 edition of the Agricultural Market Information System Market Monitor revealed improved wheat production prospects in several countries, including Canada, Kazakhstan, and Türkiye. Despite Russia's decision, global commodity markets were still relatively favorable.
Similarly, corn and soybean futures surged before returning to pre-announcement levels. Wheat futures jumped 3% on July 17 but remained well below peak levels of the previous year. The markets had anticipated Russia's move because of ongoing geopolitical tensions, so grain markets exhibited minimal immediate response to Russia's withdrawal, with future prices for key grains and oilseeds increasing only slightly. On July 17, 2023, Russia announced that it would not renew the Black Sea Grain Initiative (BSGI). Maize, wheat, and rice prices are 8%, 11%, and 3% higher, respectively, than in January 2021. (See “ pink sheet” data for agricultural commodity and food commodity prices indices, updated monthly.)
On a year-on-year basis, maize and wheat prices are 15% and 17% lower, while rice prices are 16% higher. An increase in maize and wheat prices, which closed 12% and 14% higher, respectively, after declining in the first half of July, drove the increase in the cereal price index, whereas rice prices have remained stable. Since the last Update, two weeks ago, the agricultural, export, and cereal price indices closed 6%, 4%, and 10% higher, respectively. In real terms, food price inflation exceeded overall inflation in 80.1% of the 166 countries where data is available.ĭownload the latest brief on rising food insecurity and World Bank responses The most-affected countries are in Africa, North America, Latin America, South Asia, Europe, and Central Asia. In addition, 78.9% of high-income countries are experiencing high food price inflation. Information from the latest month between February 2023 and May 2023 for which food price inflation data are available shows high inflation in most low- and middle-income countries, with inflation higher than 5% in in 63.2% of low-income countries, 79.5% of lower-middle-income countries, and 67% of upper-middle-income countries, with many experiencing double-digit inflation.
Commercial real estate prices meanwhile could suffer a 40% crash, according to Morgan Stanley, thanks to $1.5 trillion of commercial real estate debt that's set to mature by 2025 and will have to be refinanced in worse market conditions.Domestic food price inflation remains high around the world. That's further tightened financial conditions, raising the risk of corporate debt defaults.Ī credit crunch along with a full-blown recession could result in $1 trillion of corporate defaults, Bank of America estimated. It has outpaced other hedge funds in the market, with Bloomberg's credit hedge fund index gaining just 2.2% this year and losing 5% in 2022.Įxperts have warned of trouble in debt markets after banking failures earlier this year caused other regional banks to pull back on lending. The firm's flagship portfolio posted a gain of 4.5% through May, and lost just 3.8% in 2022 as markets broadly swooned, a source said. The firm is especially looking to increase exposure to commercial real estate, a source told Bloomberg, especially as the sector sees defaults and delinquency rates rise amid tighter lending standards, lower property valuations, and higher interest rates.
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