The recent few months have brought a marked drop on the global cereal market. The changes of prices reached 30 % and more. It is now expected that the trend will be reversed with the AA factor influencing the situation in the coming weeks.
News from the Southern Hemisphere
The information which is the most likely to have a strong influence on the global cereal market is coming from South America. Experts and market analysts from Argentina estimate this year’s harvest at 10.5 million tonnes of wheat, while the previous estimates of Argentinian Department of Agriculture were far more optimistic at 12 million tonnes.
Australian authorities have also announced a change of crop forecast, which is to reach 24.5 million tonnes, or 930,000 less than previously expected. Market analysts are confident that the change of initial estimates will make an impact on the global cereal market and pricing. A loss of Australia’s export capacity will raise the global risk factor concerning the prices of cereals.
Consequences for the global market
Current AA factor may prove a key threat to the world, pulling prices up as a result of shift in demand-supply balance. The changes are happening at an even faster pace than comments and emotions about this agricultural sector circle the world.
AA factor repercussions are felt by the exporters from the Middle East. Analysts have drawn attention to a growth of interest in purchases of cereals from the Arabian Peninsula, Asia Minor and Egypt.
American farmers are also involved in the changes of the situation on the global market. American market analysts have observed a sharp growth of domestic wheat exports in 2013 season.