Rabobank estimates that a rise in global demand should bring a three-year decline in commodity prices to an end. In a report, Rabobank says: “The global population is growing, and prosperity is rising, fueling the switch to more expensive, meat and dairy-rich diets.”
Rabobank suggests food prices should be the main hold up, even if farmers are braced for little or no commodity price growth during the year. Pro Farmer’s First Thing Today reports record-high stocks of staple food commodities like wheat, corn and soybeans are likely to keep world food prices low in 2017, even as inflation starts to rise in developed economies.
Rabobank points to China’s commodity stockpiles as one wildcard, noting that a decision to begin selling down these reserves could have a “profound” effect on global markets.