SOFT COMMODITY PRICES TRIPLE PRICES COULD RETURN TO A MORE STANDARD LEVEL IN 2 OR 3 YEARS' TIME The European wheat price has tripled from 110 euro per ton to a record level of 290 euro per ton in the short space of just one year. The Food Agribusiness Research and Advisory operations of Rabobank International intuitively feel this is quite possibly a temporary affair - prices are currently easing and could return to more Standard levels within the next 2-3 years. 10 ISSUE 15 JANUARY 2008 THE WORD TEXT Guus Peters PHOTOGRAPHY Getty Images This is the firm view of Dirk Jan Kennes (Director Commodities Feed Food Ingredients) and Paul Braks (Senior Commodities Associate) of Rabobank International. According to Braks, there has recently been a surge of interest in soft commodities*, which he explains is "particularly due to the arrival of bio fuels, a increasing demand for food, and rising incomes and population. However, adverse weather and low stocks have also played their part. Some of our clients - particularly growers and traders - feel this is actually a good thing; while other clients such as processors face the challenge of high and volatile input costs". Sugarcase study Grains and oilseeds are two extremely important world commodities, and prices are exploding. It has already led to a boycott of pasta in Italy and to a tortilla crisis in Mexico. According to Dirkjan Kennes, a recent case study by Andy Duff (FAR's sugar specialist in Rabobank Brazil) examined whether there were any similarities between the current surge in grain and oilseed prices and the sharp increase in sugar prices in late 2005 and early 2006. In early 2006, prices were the highest they had been in 25 years but they reverted to long-term average levels less than a year later. The analysis revealed that one of the key differences

Rabobank Bronnenarchief

blad 'RI The Word / The Word' (EN) | 2008 | | pagina 10