Additional price increases expected for many food staples

by | Mar 30, 2012

Analysts and traders have increasingly bet that agricultural prices will continue to rise as droughts in South America have hurt farmers’ yields on corn, soybean and sugar crops. Bloomberg reports that the drought conditions are fueling the prices of many commodities.

Speculators are also contributing to the uptick in food prices, as such investors increasingly bet prices will continue their ascent. Bloomberg reports that hedge funds and other speculators have been the most bullish on commodities since September. Food companies have already had to contend with mounting commodity prices over the past few years, with firms employing business cost reduction campaigns and overhauling supply chain management in an effort to offset surging costs.

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