Global food prices to stay low in 2017: Rabobank report

Staple food commodities like wheat, corn and soybean - key part of livestock diets across the world - are being stored in record volumes, weighing on the prices which are expected to be paid to farmers next year.

Rabobank highlights the role of China in creating further uncertainty in the market. The world's most populous country has huge stocks of many key commodities, with estimates suggesting that it holds 60 per cent of global cotton supplies, over half of corn, 40 per cent of wheat and 21 per cent of soybean.

If China decides to begin selling some of these reserves, this could depress global prices of commodities including cotton, sugar, corn, soybeans and vegetable oil, it said.

Stefan Vogel, Rabobank's head of agri commodity markets, said, "After three years of declining prices and extreme weather wrecking crops in many important agricultural regions, 2017 looks set to bring some much-needed stability to food prices. Nevertheless, record global stock levels mean prices are likely to remain stubbornly low - good news for consumers but less so for the world's farmers." Rabobank predicts that volatility in the global currency markets will move agricultural commodity prices during 2017, with the euro likely to depreciate as a result of French, Dutch and German elections during 2017.