Prices of grains, especially wheat will remain high but on the levels that were reached last year, according to a commodity outlook report.
The report by research and analysis group, Economic Intelligence Unit (EIU), notes that despite the recent ease in prices in the face of slowing demand, limited increase in supply still keep the prices high.
“The prices will also continue to be influenced by events in the Black Sea region following the recent obstructions that continue to disrupt grains exports from Ukraine, a critical supplier of grains, oilseeds, and vegetable oil,” the report says.
Last week,Ukrainian President Volodymyr Zelenskiy called for the removal of obstructions that he said continue to hurt food exports from Ukraine's Black Sea ports.
He was speaking during an international conference of agriculture ministers in Berlin, Germany.
He urged participants to support the Black Sea Grain Initiative, a programme that for nearly six months since its agreement has enabled exports of grain and other foodstuffs through Ukraine's major ports on the sea.
“For countries in Africa such as Kenya, Ethiopia and Sudan which are dependent on these exports, further constraints in the initiative could mean further price hikes in food commodities due to low supply and this could in turn result to empty dining tables for thousands of families,” he added.
Prices of energy commodities, most base metals and several agricultural commodities surged in 2021, and then again after the onset of the war in Ukraine in February 2022.
However, the various economic recovery measures put in place last year and the easing of global supply constraints along with increasing production of agricultural commodities, are expected to lower the foodstuffs' index this year.
Food, feedstuffs and beverages index are projected to drop by about nine per cent this year.
The Black Sea developments are also projected to have an impact on oilseeds and vegetable oil prices, which are set to reach a low level at the end of 2023.
The Russia-Ukraine war will also have an indirect impact on coffee, cocoa and tea prices through high fertiliser prices and resulting shortages, the report reads.
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