Agricultural products reach record highs

The consumer staples sector is under threat of severe supply constraints as wheat prices reach record highs. Higher food prices will have an impact on the economy worldwide, but also create the risk of further increasing geopolitical tensions.

In the investment market, the consumer staples sector has gained 4.6% in the last week, accounting for virtually 30% of the sector's trailing 12-month return. According to estimates for this year, gains in the sector are expected to grow by 9.3% on a year-over-year basis.

Agricultural Sector

On the other hand, the agricultural products sector so far this year has outperformed the U.S. equity market (using the S&P 500 as a benchmark), with returns of +12% and -5% respectively.

As a reference we can see how companies such as Procter & Gamble, Costco, Pepsi, Coca-Cola and Walmart have performed very positively in recent days.

Food prices had already risen prior to the war in Ukraine. The food price index increased by 20.7% over the previous year due to pandemic-related disruptions in shipments, increased costs for farmers, and adverse weather