The agriculture industry is booming so far in 2022, thanks to soaring food prices triggered by the Russia-Ukraine war. Russia and Ukraine are two of the world’s largest agricultural producers, and the ongoing war in Ukraine, and economic sanctions on Russia, have disrupted food production, causing a reduction in supply globally. The two countries account for approximately 30% of wheat exports and 18% of corn exports globally. The heightened supply chain disruptions have caused a supply-demand imbalance for agricultural commodities, driving some food commodity prices up.
Amid the constrained global supplies due, wheat prices have surged 37%, and corn prices have surged 21% so far in 2022. This has resulted in a solid upswing in agriculture stocks. Investors’ bullish sentiment surrounding the sector is evident in the iShares MSCI Global Agriculture Producers ETF’s (VEGI) 19.2% gains over the past year.
