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Global agricultural markets brace for turbulent 2025 amid tariffs and climate

RaboResearch report warns of potential US-led trade disputes, declining Ukrainian exports and shifting crop yields due to climate change.

Wheat Feild Ripe
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The global agricultural sector is poised for a challenging year in 2025, according to a new report from RaboResearch. The Agri Commodity Markets Outlook 2025 highlights several key factors that are expected to create significant uncertainty in global agricultural markets.

Central to these concerns is the prospect of new tariff disputes following the election of Donald Trump in the United States. The incoming administration is anticipated to target imports from China, Mexico, Canada, and other countries, potentially compressing margins for farmers, particularly those producing major grains and oilseeds.

Carlos Mera, Head of Agri Commodity Markets Research at Rabobank, explains, "This move threatens to compress margins for farmers, particularly those producing major grains and oilseeds, which have already seen price declines in 2024." The report notes that US soybean exports could be particularly vulnerable to retaliatory measures from China, exacerbating the situation for US farmers already facing a 25% decline in soy prices over the past year.

The outlook for Ukrainian agricultural exports is also concerning. Despite the success of the Black Sea corridor in facilitating exports during the ongoing war, Ukraine faces significant challenges including labor shortages, adverse weather, and low stock levels. "Even without additional Russian aggression, Ukrainian agricultural exports are expected to decline moving forward," Mera states.

Climate change continues to play a significant role in shaping agricultural productivity. The report indicates that while warmer temperatures are leading to higher yields in northern regions, they are negatively impacting production in low latitudes. Future projections suggest strong negative effects on corn yields, while wheat may benefit from higher CO2 concentration levels and expanded planting areas in high-latitude regions.

On a more positive note, coffee and cocoa prices are expected to decline in 2025 after reaching record highs in 2024. The report suggests that high prices will stimulate production expansion and demand contraction in the coming year.

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