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Home arrow Market Research Findings arrow Food and Drink arrow Earthquake In Japan: Mid-Term Implications For Global Food Demand
Earthquake In Japan: Mid-Term Implications For Global Food Demand PDF Print E-mail
Written by Euromonitor International   
19 May 2011
Japanflag The recent earthquake in Japan had short-term implications on the agricultural, energy and metal commodities markets.

Aversion to risk prompted many traders to focus on treasury securities and gold, driving down prices of agricultural commodities.

Beyond any short-term implications for input costs, there are widespread concerns in the food industry with regard to the medium-term consequences on food demand.

Commodity prices tumble in earthquake's aftermath
Immediately after news of the 11 March Japanese earthquake and ensuing tsunami reached trading floors, aversion to risk prompted a flight in capital to safer treasury securities.

This resulted in a short-term slump in prices for most agricultural commodities.

Wheat price futures rapidly reversed the gains achieved in early March, declining by 14% over the 7-13 March period.

Similarly, corn futures declined by 10% over the 3-13 March period and cocoa futures declined by 14% over the 8-18 March period.

Market losses linked to frantic panic-induced selling were, however, short-lived.

Underlying market fundamentals, particularly tightening stock supplies, prompted a steady recovery in wheat and corn prices during the second half of March.

The recovery of cocoa prices was weaker, but this was linked to high expectations for a final resolution to the Côte d'Ivoire political crisis and a subsequent positive impact on the supply chain.

Analyst Insight Francisco Redruello.

Please visit Euromonitor International for more information

5 May 2011

 
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