According to the International Monetary Fund (IMF), the global economy is supposed to slow down before rebounding next year. The IMF announced (on Monday, 30th Jan 2023) that global growth will slow from 3.4% in 2022 to 2.9 % in 2023.
According to the IMF, the downward side is attributed to Russia’s war in Ukraine and the global fight against inflation. The upward side is attributed to the reopening of China’s economy. China and India are expected to account for 50% of global growth.
The expected slowdown will definitely affect agricultural commodity prices due to demand, supply, and consumption. Though China is a great market, its size alone is not enough for a wide market in production.
The persistent drought, extreme heat waves and flush flooding experienced by various countries globally will affect the general production supply of various agricultural commodities. Delayed rainfall in 2022 led to a decline in yield and an increased production cost. In 2023, the rain might remain unreliable, which may delay the maturity of most crops. Fruit and abortion may be high on fruit crops.
Honestly, if all factors remain constant and global prices remain low, most farmers will likely make losses in 2023. The crops likely to be affected are macadamias and avocados. Tea and coffee prices are expected to rise due to low production by farmers and a constant increase in global prices.
Avocados and macadamia farmers should ensure they produce quality products that will be competitive globally. Tea and coffee farmers should also intensify their activities to ensure they get good quantity and quality produce.
However, a change in micro and macro-economic factors on tea and coffee marketing may positively or negatively impact both production and marketing. Read Also: Factors to consider before venturing into farming
The four crops are likely to be affected by the slowdown because they purely depend on the export market. Horticultural produce that depends on the export market might also be affected.
