Photo: Dušan Ančić/TanjugWhile the prices of wheat and oilseeds on world markets are falling, the costs of fuel and fertilizers are rising, putting producers under serious financial pressure. A combination of market and geopolitical factors is once again threatening the food supply chain
The global grain market is again under strong pressure, prices are falling, while production costs are rising at the same time. Analysts warn that such a development could lead to a third consecutive year of losses for manufacturers and spur again rising food prices, similar to the period after the war in Ukraine, writes Agrarheute, and the portal Agroklub reports.
On the Euronext stock exchange prices wheat followed movements on the crude oil market. After the rise during the last week, when the price for the May contract reached 210,50 euros per ton, and for the new harvest 223,75 euros, a drop of about 2,75 euros per ton was recorded at the beginning of the week.
The drop is related to the movement in the oil market, where they weakened slightly after the United States of America partially and temporarily eased sanctions on Russian oil. This halted the previous rise in prices, which was fueled by speculative trade due to geopolitical tensions.
Despite the short-term calm, the situation on the energy market is still unstable. The conflict with Iran and the blockade of the Strait of Hormuz, as well as Iranian attacks on oil infrastructure in the Middle East, maintain a high level of tension.
According to Thierry Pusch, the chief economist of the French Chamber of Agriculture, the prolonged conflict could cause a new economic shock: "If the war continues, we will find ourselves on the verge of an economic disruption that could again hit agriculture hard."
Analysts point out that since the beginning of the conflict with Iran, there has been a noticeable decline in interest in buying grain. At the same time, the recent rise in prices has encouraged increased sales and added pressure on the market.
On the other hand, weather conditions in the Northern Hemisphere are currently favorable, reducing concerns about the upcoming harvest. The organization FranceAgriMer estimates that as much as 84 percent of French soft wheat is in "good to very good" condition, which is significantly more than last year.
Despite stable agronomic conditions, costs remain a key issue. Fuel, oil and fertilizer prices rose sharply, with Brent crude once again exceeding $100 per barrel.
The increase in fertilizer prices is an additional concern for producers, especially ahead of corn sowing in Europe and the USA. If grain prices do not rise enough to offset costs, many producers could once again be operating at a loss.
Analysts warn that European farmers could have liquidity problems for the third year in a row.
The blockade of the Strait of Hormuz further complicates global trade. Although only about 4 percent of the world's grain trade passes through that route, as many as eight countries depend on those import routes, which increases the risk of supply disruptions.
Experts also warn of the possibility of a new wave of food inflation. As during the war in Ukraine, the main cause would be high energy and fertilizer costs, which are ultimately passed on to end consumers.
At the same time, food consumption has not yet fully recovered from the 2022 crisis, as households continue to save due to general price increases.
The prices of oilseeds, especially rapeseed, are even more strongly linked to the movement of oil prices. On the Euronext stock exchange, the price of canola for May 2026 fell by more than 6 euros, to around 505 euros per ton, after previous large fluctuations.
Double-digit drops in soybean prices were also recorded on the Chicago Stock Exchange, despite expectations of a possible meeting between Donald Trump and Xi Jinping at the end of the month. Traders fear that a possible delay in negotiations could slow down the recovery of exports.
In such an environment, marked by unstable markets, rising costs and geopolitical risks, the agricultural sector faces new challenges.
If trends continue, farmers could be in for another tough year, with consequences felt by consumers around the world.
Source: Agroclub
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