Global wheat and maize prices rose for the third consecutive month in March, according to the latest FPMA Bulletin from FAO. This increase brings prices more than 10 percent above their December 2017 levels.
Prolonged dry weather in the United States drove much of the price increases for wheat, as did concerns about cold and wet weather in some parts of Europe. Dry weather in Argentina contributed to maize price increases. Global demand for these commodities also remained strong in March, further driving up prices.
In contrast, global rice prices remained relatively stable in March. Prices fell slightly in India, Thailand, and Vietnam but these decreases were balanced by slight increases in price in Pakistan. Price in Brazil were the exception, reaching a three-month low due to depreciation of the local currency, large carryover stocks, and the arrival of new crops.
Several countries received domestic price warnings this month, including Argentina, Burkina Faso, Madagascar, Mali, and Nigeria.
In Argentina, both yellow maize prices and wheat prices reached record highs in March. This was the fourth consecutive month of price increases for yellow maize, and prices reached 50 percent higher than their March 2017 levels. Concerns over dry conditions contributed to the price increases of both commodities, as did strong export trends and a weakening of the local currency since December 2017.
Burkina Faso saw stable but high coarse grain prices in March, despite overall positive 2017 output. According to the bulletin, traders and producers have withheld grains from markets in order to meet strong demand from institutional buyers and warehouse operators. In addition, northern parts of the country experienced production shortfalls in 2017, further driving up prices. In an effort to reduce consumer prices, the Government of Burkina Faso has instituted the sale of cereals at subsidized prices. Overall, food security within the country remains adequate due to humanitarian support and home garden production.
Locally produced rice prices fell in Madagascar in March but remain at record highs due to low 2017 production and carryover stocks. Market supplies rose somewhat in March as a result of recent harvests of the minor season paddy crop, as well as expectations of larger output in 2018 that prompted traders to sell their existing stocks. The price of imported rice fell slightly in March as well, due largely to the depreciation of the local currency, but remain close to record highs.
While staple food prices remained generally stable in Nigeria in February (the last month for which data is available), they remain high overall, particularly in the northeastern regions of the country. The continuing high prices are a result of the 2016 depreciation of the Nigerian Naira against the US dollar, as well as increased fuel and transportation costs and strong demand from neighboring countries. While recent good harvests put downward pressure on prices, this movement was limited by purchases from traders to replenish their stocks. Year-on-year food inflation also remained relatively high in February at 17.6 percent.