Photo credit: Tommy Trenchard/Panos

In April 2019, the FAO Food Price Index rose 1.5 percent from March and reached its second highest level since June 2018. The increase was driven by the slight price increase in meat, diary, vegetable oils and sugar prices. The index, however, remained 2.3 percent below March 2018 levels.

The Cereal Price Index was down 2.8 percent from March and 5 percent below its April 2018 value. The decline was pressured by large export availabilities and slowing trade.

The Vegetable Oil Price Index increased marginally (0.9 percent) from the previous month, underpinned by firming oil prices and reflecting the slight increases in palm and soybean oil values. The palm oil price increased due to rising global import demand with inventory reduction in major exporting countries. Soybean oil prices notched up due to robust domestic demand in the United States from the bio-diesel and food sectors.

The Dairy Price Index rose from March 2019, its fourth consecutive month of increase due to continued and robust global demand. Import demand rose up due to anticipated further tightening of exports from Oceania with decline in seasonal milk production due to dry weather.

The Meat Price Index grew by 3 percent from March with sharp price increases for pig, poultry, bovine and ovine meats because of a sharp surge in import of pig meat in Asia, particularly China where the domestic pig meat production has acutely fallen due to therapid spread of African Swine Fever.

The Sugar Price Index rose marginally from March and was largely driven by firmer crude oil prices and stronger energy prices.

The latest edition of the AMIS Market Monitor points to comfortably balanced markets for the year.

The 2019 forecast for global wheat production increased from 2018-19 levels, with the increase concentrated in Australia, EU and Russia. This was driven by rising food consumption, although feed use also rose. Anticipated rise in wheat trade is supported by stronger import demand in Asia and Africa, while Russia remains the world’s largest exporter of the commodity. Large wheat inventories for all major exporters except the US led to higher anticipated 2020 ending stocks.

After a 1.9 percent plunge in 2018, the 2019 forecast for maize production is expected to increase due to production recovery in Argentina, Brazil and the US. The anticipated utilization increase is because of growth in feed demand; trade prospects are to contract for the first time in two decades, mostly affecting the EU. With drawdowns in inventories in China and US, stocks ending in 2019 are expected to decline.

The 2019 rice production forecast matches the 2018 peak. This steadiness is due to moderate output expansion in Asia along with contractions in other regions, as well as unchanged 2019 trade.

The 2018-19 soybean production forecast increased due to improved harvest outcomes, notably in Argentina and Brazil, among other countries. Soybean utilization remained unchanged. The carry-out stocks for the year increased significantly based on higher forecasts for inventories in China, Brazil and Argentina.

Global fertilizer prices declined in April. Natural gas prices fell due to lower global demand; this decrease in natural gas prices also led to a decrease in Ammonia prices. Urea prices rebounded marginally as exports from China and North Africa slowed but stayed below fall 2018 levels. DAP prices faced continued decline due to large supplies in US and low seasonal demand in China. Prices for potash displayed steady decline, mainly in the US Gulf, due to delays in the start of the spring season.

Swati Malhotra is Communications Specialist for IFPRI's Markets, Trade and Institutions division.

Post new comment
The content of this field is kept private and will not be shown publicly.
Share