Economic studies


Central & Eastern Europe
Latin America
Mid-East & Turkey
Northern America
Western Europe
Change sector


  • Relatively resilient to economic shocks because food requirements are not very compressible
  • Levels of agricultural commodity stocks generally comfortable for 2024, particularly for cereals (wheat, corn)


  • Vulnerable to weather and climate (El Niño)
  • Affected by protectionist and geopolitical tensions
  • Highly sensitive to energy and chemical input prices

Risk Analysis

Risk Assessment

The coming months should confirm the trends we saw in agricultural commodities at the end of 2023. We expect a two-speed development. Some commodities, such as sugar, rice and cocoa, are approaching record prices on international markets, while others, such as cereals, are stabilising at levels well below their 2022 peak following Russia's intervention in Ukraine.
The agri-food sector will be affected by two major factors in 2024. First, the weather will be particularly unpredictable in the first half of the year, largely due to the El Niño phenomenon. Second, geopolitical tensions will continue to disrupt agricultural supply chains, both in terms of foodstuffs and chemical inputs.

Sector Economic Insights
World cereal production will fall by 2-3% in 2024

The expected decline is the result of both uncertainty about future yields (weather risk) and a strong base effect – 2023 was a record year for world cereal production. The fall in US sown area (-6% YoY), likely lower yields in Western Europe and Russia (unfavourable weather), plus the loss of area and production capacity in Ukraine are behind the decline in winter wheat production in the northern hemisphere at the start of the year. More specifically, it means that a group of countries accounting for around 40% of world wheat production will face unfavourable production conditions.
In China and India, the area under wheat is increasing. Overall, the forecasts for wheat production in China and India are very positive. However, the meteorological risk associated with the El Niño phenomenon weighing on the Indian subcontinent could damp these forecasts. In addition, other cereals such as rice and corn, are likely to be more affected by the phenomenon.
In the southern Hemisphere, forecasts for 2024 cereal production are positive, with production in Argentina increasing due to favorable weather conditions and corn production in Brazil reaching a satisfactory level (after a record year in 2023). In South Africa, we see positive momentum for corn planting, but the severe droughts that have hit southern Africa in recent years is cause for ongoing caution.
Last, world rice production in 2024 should stabilise at a similar level to the previous season (+0.5% YoY).


Weather risk will be a major factor in agriculture worldwide in 2024

The effects of El Niño are expected to persist into the third quarter, increasing the vulnerability of the agricultural segment in Indo-Pacific countries, which may consequently create positive externalities for unaffected regions (Canada, China, Central Europe).
As a result, across much of the Indo-Pacific region, we expect rising temperatures and droughts to reduce agricultural production for most commodities. In India, the decline in monsoon rainfall, following a record drought year in 2023, could have a severe impact on agricultural production (sugar, rice, wheat).


Trade will stabilise but continues to be a major source of uncertainty

We expect a very slight recovery in 2024 (+1% YoY or +3.7 million tons) (-2% YoY in 2023). However, significant diversity exists between agricultural commodities. While trade in coarse grains will increase by 3.3% YoY (+7.5 million tons) in 2024, trade in wheat and rice will decline by 1.3% and 2.3% YoY, respectively.
The collapse of Ukrainian production and export capacity will continue to weigh on trade, particularly in wheat. Meanwhile, rice and sugar will continue to suffer from export restrictions introduced by India and Indonesia in particular. These restrictions will remain in place until at least Q3 2024. Several emerging markets are restricting their exports of agricultural commodities. The impact of the war in Ukraine has prompted them to protect themselves against rising prices. In the medium to long term, population growth in many emerging markets and worsening weather conditions will continue to put pressure on access to food resources and are likely to exacerbate the decline in some agricultural trade.
The weaponisation of agriculture, i.e., the use of agricultural production and food supplies as a means of wielding geopolitical pressure by certain countries (such as Russia), has been added to the list of risks to watch out for in the sector. The risk of food shortages in vulnerable regions allows Russia to maintain pressure on Western leaders and public opinion. The non-renewal of the Black Sea Grain Initiative by Russia on 17 July 2023 was a step in this direction. The emergency corridor, launched in March, enabled the transit of 33 million tons of grain by July 2023, 65% of which was destined for developing countries. While China was the main destination (in terms of grain volume) for shipments from Ukrainian ports, the initiative made it possible to supply countries highly dependent on grain imports, such as Bangladesh, Egypt, Libya and Tunisia, and to maintain the activities of the World Food Program (WFP) by shipping 725,000 tons of wheat to Ethiopia, Yemen, Afghanistan, Sudan, Somalia, Kenya, and Djibouti. Russia's refusal to extend this initiative led to a very temporary rise in cereal prices, which was quickly offset by the downward trend in cereal prices in place since Q4 2022. As a result, since July 2023, North Africa and Bangladesh have been most affected by the decline in Ukraine's cereal production and export capacity.
Ukraine's provisional integration into the European Common Agricultural Market is also creating deep tensions within the European Union. Early in 2024, this issue triggered the anger of the European farming community. There have been numerous demonstrations in France, Spain, and Poland, as well as in Brussels. European farmers are mainly protesting against free trade agreements, imports of Ukrainian grain and European environmental regulations. In 2023, Bulgaria, Hungary, Poland, Romania, and Slovakia were granted an emergency budget of EUR 150 million to compensate for what they denounced as distorted competition. In the medium term, however, the Common Agricultural Policy, and particularly its multiannual programme for 2023-2027, will have to be reviewed in the light of the rapid changes in the European and global geo-economic context.
Last, the resurgence of security problems in the Red Sea suddenly poses a major threat to agricultural supplies. The Suez Canal accounts for around 15% of world trade in wheat and rice, and 7% in maize. In January, however, the volumes passing through the canal fell by two-thirds compared with December and the same month last year. Only 2.6 million tons of grain passed through the canal in January 2024, compared to 6.6 million in the previous month and 6.4 million a year earlier. East Africa, Iran and Pakistan could be particularly affected in terms of grain supplies. Increased delivery times and freight costs are pushing up food prices in these regions and countries.


Last update : July 2023