January 2023 Market Report

Food prices touched their lowest level in 2022 during December, but upward pressure is mounting. Demand in late 2021 and early 2022 experienced a sharp increase driven by the lifting of pandemic restrictions and expectations of further growth. However, after inflation started to hit, coupled with a higher cost of capital, consumer demand began to decline, leaving a part of the imports of late 2021 and early 2022 unconsumed, driving prices down. A high amount of inventory of several products was reported as H2 2022 started.

Nonetheless, upward pressure is now mounting from two fronts: a weaker US dollar and stronger oil prices. A reversal in agri-products' prices downward trend can already be seen in some products, such as beef, salmon, and nuts. This could be exacerbated by other potential bullish factors such as the worsening of geopolitical tensions, unfavorable weather, and the outbreak of supply-disrupting diseases.