Further we have been discussing the impact of climate change (and potentially el nino) on food prices, where food processors have been running out of choices (substitution and buying ahead) to keep food prices down for everyday consumers like you and me. The result has been higher prices at the grocery store. This happened from the destruction of the agriculture and livestock chain from the freezing weather in Q1. Now after the decline in July from perfect weather that brought down the grains, the agriculture is priced the lowest since July of 2010.
This may open a window of opportunity for food processors to purchase cheap ingredients ahead of further price spikes that may happen from an el nino and climate change. Then, we may see lower prices again at the grocery store.
This article was written by Jodie Gunzberg, global head of commodities, S&P Dow Jones Indices.
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