2022 was an eventful and demanding year for the agricultural sector. Many sectors were still finding their feet after the challenges posed by COVID-19 in the previous two years and the subsequent supply chain crisis from the latter parts of 2021 when they were hit with an unprecedented increase in input costs. In only the second month of the year, the Russia-Ukraine conflict triggered an exponential increase in global food, fertilizer, and energy costs, adding to an already bullish trend since mid-2021. The ripple effect of the conflict led to record inflation, exorbitant input costs, shortages of major staples, and rash policymaking. Amidst elevated production costs, producers had to deal with adverse weather conditions and the effects of climate change. Looking forward to 2023, producers will still face an unpredictable economic climate. The Russia-Ukraine war is still ongoing, and many logistical bottlenecks remain in the supply chain. A volatile geopolitical landscape could lead to trade disputes and regulations, impacting agricultural trade. Producers also have to contend with more weather anomalies brought on by the La Niña phenomenon. However, 2023 will also bring new opportunities for innovative solutions and developing robust supply chains. Consumers’ emphasis on healthy and sustainable eating, which was pushed to the background by high living costs, could again gain traction if living costs continue to decline.
Trade4go
Jan 12th, 2023
