ING Group: Grain prices +40% by 2020

29-11-2007 | |

A new report by ING group predict that agricultural prices will increase further by another 40% by 2020 caused by a tight supply brought on in part by increased demand for grains, a global water shortage, and changing weather patterns.

The report provides an insight into the adjustments
food and beverage managers are going to have to make to their logistics systems,
pricing strategies, and product development to cope with the coming crisis.
ING’s analysts see opportunity for large companies that are better able to
adjust and leverage the inflationary environment to their advantage.“The
virtuous inflationary cycle is created as leading consumer goods players
translate higher input prices into accelerating sales in premium brands and
developing markets,”
the report stated.

Small and mid sized companies
overall will have the most problems with input price pressure, while their
positioning in regions and categories is focused too closely on western markets
and products that depend on a supply of meat or grains.

ING Group

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