Bumper harvests across the world’s major cereal producing regions have led to a sustained fall in farm gate prices this year across a number of soft commodities including corn, wheat and soybean, which combined underpin the global food market.
This is good news for consumers, helping rein in inflation and the average cost of a basket of groceries bought in a British supermarket.
However, food experts are already forecasting that rising prices will return in a few years, spurred on by the changing eating habits of China’s increasing urbanised population and their growing taste for beef steak.
According to the Macquarie Agricultural Commodity Price Index, launched this month by the investment bank to help macro-economists to forecast food inflation efficiently, prices will continue to fall until the end of 2015. Based on five sub-indices, which measure the global consumption of 28 primary agricultural commodities, prices began falling in 2012.
The average price of agricultural commodities has fallen 11pc this year, led by a drop in the cost of animal feed, which fell 3.7pc, according to the index. Macquarie expects prices to continue to drop by a further 10pc next year before staging a recovery in two years time provided that adverse weather does not wreck harvests.