Dry weather and government stockpiling have pushed soyabean prices to a four-year high, as a broad rebound in agricultural commodities creates unease about inflation, reported the Financial Times.
Grains and soyabeans have been rising steadily since the middle of the year, buoyed by governments shoring up their reserves in anticipation of disruption from the second wave of the Covid-19 pandemic. China has been a particularly active buyer as the country steadily rebuilds its pig herds in the wake of the devastation caused by African swine fever, said the FT.
This strong demand “suggests that some countries are concerned about food inflation,” said Andrew Rawlings, an analyst at Rabobank. Inflation is “creeping up in some places”, he added.
Hot and dry conditions in southern Brazil and Argentina as a result of the La Niña weather pattern have knocked the supply of soyabeans, lifting prices traded in Chicago to $11.01 a bushel, up more than a third since their April low. “Any further weather issues in South America and this can give reason to see soya in the teens,” said Matt Ammerman at US commodity broker StoneX.