Agricultural prices logged their first fall this year in June. Prices fell for six of the eight agriculture commodities tracked by FocusEconomics. Altogether, agricultural prices fell a sharp 7.3% on a month-on-month basis in June (May: +3.0% mom).
Corn and soybean prices declined have markedly in recent weeks as retaliatory tariffs that China is imposing affect U.S. agricultural products. Moreover, excellent crop conditions are exerting downward pressure on prices. Cocoa prices, which posted a stellar start to the year, fell in June as investors expect strong supply from top producers Ivory Coast and Ghana. While the two countries decided to work together to control cocoa prices, analysts expect that this move will have a limited impact on global cocoa prices in the short term.
While strong market fundamentals should push prices up this year, the increase will be dampened by rising protectionist trade policies affecting agricultural products, and increased supply for key commodities. Our panel of analysts forecasts an 18.1% annual increase in prices in Q4 2018. Agriculture prices are seen expanding 1.9% year-on-year in Q4 2019.