The NAB Rural Commodities Index Increases As The Prices For Wheat And Cattle Go Up

Must Read

NAB’s Rural Commodities Index* revealed that Australian agricultural commodity prices have slightly increased in the past two months, with a 1.1% rise in October following September’s 1% increase.

NAB’s November Rural Commodities Wrap, released on 15 November 2022, reports that higher wheat and cattle prices have driven much of the recent increase in rural commodity prices. These price hikes have offset the costs of cotton, vegetables, and fruits.

Phin Ziebell, the senior agribusiness economist for NAB, said that while current global economic conditions have decreased the demand for non-energy bulk commodities, agriculture prices remain elevated due to seasonal and geopolitical concerns.

Seasonal conditions have been generally very supportive this year, with a forecast of a big winter crop just around the corner. However, floods across parts of eastern Australia, particularly in Victoria, New South Wales, and Tasmania, have destroyed previously good crops for some growers,” said Mr Ziebell.

Wheat prices have shot up since mid-September due to various factors, the most important being the deterioration of relations between Russia and Ukraine. With supply tight, high wheat prices will likely continue shortly.

After evaluating the cattle, we have determined that the price decrease from July has mostly reversed due to buyers re-analyzing biosecurity risks. That said, daily prices are dropping again, and we anticipate November’s costs will be lower than October’s.

Cotton prices have now retreated significantly from extraordinary highs earlier this year. AUD-denominated Cotlook A has been down from a peak of $1,200/bale to around $700-800/bale recently. Despite the decrease, growers have every reason to remain optimistic given the seasonal conditions,” Mr Ziebell said.

With global oil production in flux, prices at the pump remain volatile. Tensions between Russia and Ukraine caused an initial price surge. Still, concerns over economic growth, outbreaks of Covid-19 in China, and changes in output from Petroleum Exporting Countries all contribute to ongoing instability.

According to the US Energy Information Administration (EIA), fuel prices might drop in 2023 due to various circumstances. These include lower crude oil prices and a stronger Australian dollar. 

NAB has predicted that the AUD will improve to US72c by 2023 and US74c by 2024, with an expected end-of-the-year value of around US65c.

- Advertisement -spot_img
Latest News
- Advertisement -spot_img

More Articles Like This

- Advertisement -spot_img