War and extreme weather have driven agricultural prices toward their largest
monthly rise in over a decade. The Bloomberg Agriculture Spot Index, tracking 10
major commodities, was up more than 13% in August as of last Friday, on course
for its biggest monthly advance since July 2012. Wheat has been a primary driver
after attacks on Black Sea ports cut shipments and pushed prices to three-year
highs; sugar and cocoa have climbed roughly 20% as El Nifio strengthens. Higher
energy and transport costs tied to the Iran conflict are amplifying food
inflation risks and could accelerate pass-through to retail staples from bread
to meat and dairy, though consumer-price effects may lag. Ongoing reciprocal
attacks by Russia and Ukraine on ships and ports have further slowed grain
exports.
