Crazy increase in global food prices "corn contracts" - Economist

The price of corn futures contracts for July rose above $8 a bushel during trading on Monday, April 18, 2022, the highest level since September 2012.

We find that "corn" is just one of the agricultural commodities that have seen a significant increase in prices in recent weeks, due to the outbreak of the Russo-Ukrainian war and the fear of disruption of supply chains.

As Ukraine is a major exporter of wheat and other materials, such as sunflower oil, while Russia is a major producer of wheat and many chemicals used in fertilizers, which leads futures traders to bet that higher input costs and increased demand for corn as an alternative food ingredient will lead to to the high price.

And before the Russian-Ukrainian conflict intensified, there was great pressure on agricultural commodity prices due to supply chain disruptions and high transportation costs that contribute to global inflation, in addition to drought in West America and other parts of the world, which led to higher prices.

The high prices of corn and other food commodities contribute to the highest inflation rate in the United States of America since the 1980s, which prompted the Federal Reserve to start raising interest rates.