Consumers’ scramble to empty supermarket shelves, hoarding food in case they have to hunker down against prolonged anti-coronavirus campaigns, may be having an impact on food prices.
Agricultural commodity values as a whole have proved resilient against the market mayhem caused by Covid-19, supporting ideas of their link to food offering defensive qualities.
Sure, the Bcom ag subindex is down 6.7% this month, and earlier this week hit its lowest since it started in 1991.
But that is less than half the 15.3% tumble in the overall Bcom commodities index so far in March, while Wall Street’s S&P 500 share index has plunged 18.8%.
‘Increased buying of bread’
And there are signs that prices of food staples have proved particularly strong.
In Europe, which has seen some of the most manic consumer stockpiling, prices of soft milling wheat in the French port of Rouen have fallen by just 0.6% (down 2.6% in dollar terms) to E179.00 a tonne over the past month, according to Agritel.
In the US, ADM Investor Services, part of the Archer Daniels Midland ag trading empire, noted ideas that hard red winter wheat premiums were being “supported by talk that US consumers have increased buying of bread as restaurants are closing and more are cooking at home”.
Rival broker CHS Hedging too noted talk “that with people home due to the coronavirus, the demand for higher protein wheat is high for bread making”.
Pasta vs beer
Prices of durum wheat are proving particularly resilient, tallying with consumers’ particular preference for stashing pasta, which is made from the grain.
Durum values at Port la Nouvelle in southern France have held steady at E260 a tonne over the past month, and are up 6.1% for 2020, according to Agritel.
However, as to what we Europeans are imbibing with our bolognese, and quaffing with their carbonaras, the analysis group attributed some lag in malting barley prices, down 1.3% this month to E158 a tonne in Creil, in part to the fact that “beer consumption is in sharp decline” as Covid-19 fears empty bars.
It also noted pressure from “drier weather in France and Europe”, which is allowing for “a significant advance in spring barley planting”. That could be keeping farmers from their favoured tipples too.
|French crop prices|
|March 19 price||Change for this month||Change for 2020|
|Durum wheat||$260 per tonne||unchanged||+6.1%|
|Soft milling wheat||$179 per tonne||-0.6%||-3.2%|
|Malting barley||$158 per tonne||-1.3%||-2.5%|
|Corn||$159 per tonne||-1.9%||-4.2%|
|Rapeseed||$347 per tonne||-9.4%||-16.2%|