Photo Credit: Andrew Ross

The FAO’s monthly report on food price trends was released on February 13. The bulletin reports on recent food price developments over the past month at the global, regional, and country levels, with a focus on developing countries, and provides early warnings for high country-level food prices that may negatively affect food security.

Food prices showed mixed global trends this month, declining in some countries and rising in others. Notably, a few countries experienced record high, or near record high, prices, mainly driven by poor domestic availabilities due to inadequate rainfall. The benchmark US wheat price averaged 201 dollars per ton in January, up 7 percent from December but 6 percent below its year-earlier levels. These increases were driven by reports of the smallest plantings in the US since 1909, as well by concerns about cold and dry weather in the US and Europe. Similarly, the benchmark US maize prices averaged around 159 dollars per ton in January, up 4 percent from December but still 1 percent below its year-earlier levels. These increases were driven by strong export sales and weather-related concerns for key growing areas in South America. The FAO all rice price index also increased by 2 percent in January, mainly driven by increased demand and some production concerns in India and Pakistan.

Several countries received domestic food price warnings this month. These warnings mean that the prices of one or more basic food commodity are at abnormally high levels, which could negatively impact access to food. The countries that received warnings include Argentina, Ecuador, Kenya, Malawi, Mozambique, Nigeria, Somalia, South Sudan, Sri Lanka, Swaziland, Uganda, and Tanzania. In Argentina, yellow maize prices reached near record highs in January, despite a record 2016 harvest; the price increase is due to strong exports driven by a weak local currency. In Ecuador, maize prices also rose sharply due to tight supplies caused by a poor 2016 harvest. In Kenya, maize and bean prices increased sharply due to poor harvests caused by insufficient rainfall. Similarly, in Malawi, Mozambique, Tanzania, and Uganda, maize prices increased sharply due to reduced production caused by poor rains and regional dryness.

In Nigeria, cereal prices showed mixed trends but generally remain at record highs, driven by a consistent depreciation of the Nigerian Naira and ongoing civil insecurity. In Somalia, sorghum and maize prices surged due to reduced production (estimated at 25 percent of the last five-year average) caused by a severe drought. In South Sudan, food prices declined marginally; however, they remain two to four times above their year-earlier levels due to insecurity, inflation, and a depreciation of the local currency. In Sri Lanka, unseasonably dry weather drove rice prices up significantly to record levels. In Swaziland, maize prices decreased moderately but remain significantly above their year-earlier levels.
At the sub-regional level, West Africa (other than Nigeria) showed declining coarse grain prices driven by a good 2016 harvest. Similarly, in most countries in the region, prices were below their year-earlier levels thanks to sustained price decreases in recent months.

Prices in Southern Africa showed mixed trends in January. In South Africa, maize prices declined sharply, driven by a favourable production outlook and a continued strengthening of the rand. By contrast, in Mozambique and Malawi, prices increased due to drought-reduced harvests for 2016. In Namibia and Swaziland, maize prices were relatively stable in January but remain well above their year-earlier levels. In Zimbabwe, maize prices remained relatively stable, as strong imports from South Africa compensated for the relative weakness of the US dollar (the main currency used in the country).

In Eastern Africa, cereal prices generally rose in January, reaching very high levels in a number of countries. These increases were mainly driven by drought-reduced harvests. Somalia, which is in the midst of a severe drought, experienced large price increases. In Tanzania, Kenya, and Uganda, prices remained very high due to a relatively poor 2016 harvest caused by dry weather. By contrast, in Ethiopia, maize and livestock prices decreased.

In Central America, maize prices increased marginally, following seasonal trends, but remain below their year-earlier levels. This reflects good market availability as the region recovers from two years of drought-reduced crops. Similarly, the price of beans in the region remained stable, reflecting good domestic supplies and favourable production prospects.

In East Asia, domestic rice and wheat prices remained relatively stable. Rice prices increased slightly in Thailand, India, and Cambodia due to strong local and international demand pressures; in China, the Philippines, and Indonesia, rice prices remained stable, reflecting ample availabilities from domestic production and imports. By contrast, in Sri Lanka, rice prices increased steeply, reaching record levels due to reduced 2016 output and unfavourable production prospects for 2017.

In South America, maize and wheat prices showed mixed trends in January; most of the region experienced stable or declining maize prices, reflecting ample supplies from recent harvests. In Brazil, Chile, and Bolivia, prices decreased while in Peru, Ecuador, and Columbia, prices remained relatively stable. By contrast, in Argentina, prices rose sharply, reaching well above their year-earlier levels due to strong demand and high levels of exports driven by a weak currency.

All the data used in the analysis can be found in the FPMA Tool.

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