More than just supply and demand factors shaping global agriculture in 2026 – with geopolitics playing a crucial role

RaboResearch Australia and New Zealand general manager Stefan Vogel said with so much protection from governments, supply reaction to low prices in many key export regions is minimal.

“The US planted area is expected to remain near record highs. And in Brazil and Argentina, we are expecting area expansions in the coming season,” he said. “Australian area usually very much depends on rainfall, and a likely La Nina may provide that for the 2026 planting season. After a good crop in 2025/26, Australian farmers are unlikely to cut back willingly.”

“As a result, unless there is a weather event in a major producing region, global grain and oilseed prices will likely remain subdued in 2026,” Mr Vogel said.

Diverging markets

Tariffs and trade barriers could widen price gaps between producing regions, the Rabobank report says.

“Before the Trump-Xi agreement, Brazil’s soy export prices benefited from strong Chinese demand, while US prices were heavily depressed. US and Brazil soybean prices have come closer together since the announcement of the agreement, but given that we still see a lot of trade barriers ahead, more price differences are likely,” Mr Mera said.

“We expect these geographic price differentials to persist or increase in 2026.”

Meanwhile, the report said the tariff war’s unintended effects are still being corrected. US authorities are reviewing tariffs on products the country does not produce – such as coffee and cocoa – which could ease costs for US consumers and restore trade flows from producing nations.

Economic outlook

Despite trade tension, global growth in 2025 has exceeded expectations, supported by monetary easing, lower energy prices and frontloading of exports ahead of tariff hikes – a tactical gambit to mitigate early shock, the report said. However, these mitigating factors will fade and the negative effect of the tariffs and uncertainty are likely to surface in 2026.

Rabobank forecasts global GDP growth at 2.9 per cent in 2025, easing to 2.7 per cent in 2026. While trade between major blocs will likely slow, intraregional trade could rise due to diversion. Inflationary pressures persist in some regions but are less severe than previously projected.

Mr Vogel said Australia’s GDP is expected to grow at just under two per cent in both 2025 and 2026. “While recent data improved the short-term outlook, the labour market is softening. Employment growth has missed expectations in three of the last four reports and participation may have peaked,” he said. “Inflation risks remain elevated due to strong consumption, creating a policy dilemma for the Reserve Bank of Australia – cut rates to support jobs or hold to curb inflation. With the later deemed to be more likely over the coming months.”

Commodity outlooks

Wheat: The 2025/26 season marks the first global wheat surplus in six years, with output up by 25 million metric tons. However, the Rabobank report said lower prices (around an average of USc 533/bu in 2025 so far) are likely to trigger area reductions, leading to a projected 4 million metric ton deficit in 2026/27. Wheat prices are expected to remain constrained by cheap corn, though adverse weather or renewed geopolitical tension could lift them.

Mr Vogel said importer behaviours is in flux, with a push toward broader origin diversification and great use of spot markets reflecting memories of the disruption of the past few seasons. “US-led trade negotiations also pose a challenge to business as usual, with several markets in Asia – a region that Australian exports tend to dominate – willing to increase their purchases of US wheat,” he said.

Coffee: After record-high arabica and robusta prices in 2025, RaboResearch is expecting supply-demand balance in 2025/26, with the first significant global surplus in five years – estimated at 7 million to 10 million bags – likely in 2026/27. Prices are expected to stabilize between USD 2.5 and 3.5/lb by the end of 2026, although volatility will remain high in the short term.

Cocoa: Cocoa prices have nearly halved this year amid a rebound in production and weak demand. RaboResearch forecasts a 328,000 metric ton surplus for 2025/26 and a potential 403,000 metric ton surplus for 2026/27. Production is shifting from Côte d’Ivoire and Ghana toward Latin America and Indonesia, increasing the risk of future overproduction and continued volatility.

The only certainty: Uncertainty

Mr Mera said, the world is only at the beginning of the “middle game” of this geopolitical struggle. “We foresee continued trade disruptions, fluctuating regional prices, heavy government intervention, and a high probability of unexpected events.”

Geopolitical fragmentation has redefined global agriculture, he said. “Farmers, traders, and policymakers alike must prepare for a world where trade is disrupted and the unexpected is now the baseline.”
 

Rabobank Australia & New Zealand Group is a part of the international Rabobank Group, the world’s leading specialist in food and agribusiness banking. Rabobank has more than 125 years’ experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank is structured as a cooperative and operates in 38 countries, servicing the needs of more than nine million clients worldwide through a network of more than 1000 offices and branches. Rabobank Australia & New Zealand Group is one of Australasia’s leading agricultural lenders and a significant provider of business and corporate banking and financial services to the region’s food and agribusiness sector. The bank has 87 branches throughout Australia and New Zealand.