Prices for food, feedstuffs, and beverages (FFB) will rise over the course of 2024, with the production of coffee and cocoa forecast to fall by nine percent and 13 percent respectively for the 2023/24 crop season, research suggests.
After three years of extreme volatility, commodities prices are set to broadly stabilise in 2024, despite the many geopolitical headwinds impacting the global economy at the moment, the Economist Intelligence Unit (EIU) has said.
Their new whitepaper – the Commodities Outlook 2024 – has stated that this holding pattern for commodities prices in 2024 will ensure markets remain volatile in the short term before secular trends, especially those linked to the green transition, prove to be important.
Commodity prices often impact overall inflation. When living costs surged in 2021 and 2022, much of the change was attributed to factors like rising prices for oil and agricultural products.
Retailers warned that new border checks on EU goods entering the UK, which are due to begin from April, could further push up prices.
From January 30 , imports of items including some animal products, plants and plant products, and high-risk food of non-animal origin from the EU will require health certificates, followed by physical inspections of these goods at the UK border from the end of April.
Non-food products had a “challenging December” with price inflation rising to 3.1 percent from 2.5 percent in November as prices bounced back after Black Friday discounts and before the January sales.
The EIU found base metals price index will increase by an average of three percent in 2024 after falling by over 11 percent in 2023.
Energy prices, excluding crude oil, will trend downwards in 2024 and the average European natural gas prices will fall by 20 percent in 2024. Despite market volatility, crude oil will trade around $80.
Helen Dickinson, the chief executive of the British Retail Consortium trade body that represents most big retailers, said: “Retailers will continue to do all they can to keep prices down in 2024, but there are obstacles on the road ahead [including] new border checks for EU imports, [and] hundreds of millions more on business rates bills from April.
“Government should think twice before imposing new costs on retail businesses that would not only hold back vital investment in local communities, but also push up prices for struggling households.
When living costs surged in 2021 and 2022, much of the change was attributed to factors like rising prices for oil and agricultural products. When inflation began a steady decline throughout 2023, declining commodity prices were again a contributing factor.
Despite inflation sitting at four percent, the EIU believes food prices will continue to rise causing ongoing stress for those stretched for cash day to day.
Shop prices continued to rise at 4.3 percent in December as a price rise on non-food items offset easing costs on food.
The increase in the price of goods in stores compared with a year ago was the same rate of inflation as in November and came after several months of easing.
