Crane hauling fertilizer. Photo Credit: Adam Cohn (flickr)

Global crop prices continued their fall in November according to the FAO Food Price Index and the AMIS Market Monitor, both released this week. Overall favorable production levels and high inventories, combined with a strong US dollar, have contributed to weakening prices. Meat prices saw the most dramatic fall last month, down 23 percent. Cereals and oils each dropped by 16 percent, while dairy dropped by 15 percent. After experiencing a brief spike in October, vegetable oils declined by 3.1 percent.

Sugar prices rose in November by 9.1 percent, reaching the highest levels seen since February; this increase was driven largely by delayed harvests due to extreme rains in South America and other weather-related crop damage in several leading producer countries. Despite this spike, however, sugar prices are still down 10 percent year-on-year.

The November AMIS report continues to highlight El Nino as an important factor for food prices and production in the coming months. This month’s report also introduces a new section on global fertilizer prices, covering urea, DAP/MAP, potash, and natural gas. As fertilizer use throughout the world grows, the cost of fertilizers can significantly impact agricultural input and production costs, and thus ultimately agricultural output prices. Several AMIS countries represent a large share of global fertilizer output (in terms of production, consumption, and trade volumes), and thus play an important part in global fertilizer trade.The new section aims to improve fertilizer market transparency so that policymakers and stakeholders have a clearer idea of current market trends to make evidence-based input decisions.

The November report looks at fertilizer prices from January 2014 through September 2015. This period saw significant fluctuation for all of the studied fertilizer varieties. For example, the price for ammonia-US Gulf NOLA fell by 30 percent from 2014 to 2015; during the same period, the price for potash from the Baltic region increased by 9.6 percent. From August to September 2015, the price of five fertilizer types (ammonia- US Gulf NOLA, urea- US Gulf, DAP- US Gulf, urea average, and natural gas) declined (by 6.3 percent, 5.1 percent, 1.4 percent, 3.7 percent, and 4.1 percent, respectively); the price of ammonia- Western Europe, urea- Black Sea, DAP- Baltic, and ammonia average all rose during this period (by 2.7 percent, 1.9 percent, 1.1 percent, and 0.2 percent, respectively). Prices for potash- Baltic, and potash- Vancouver saw no change from August to September.

The AMIS Market Monitor represents the collective assessment of the ten international organizations that form the AMIS Secretariat concerning international market developments and outlook for wheat, maize, rice, and soybeans. Its coverage includes the world supply-demand, policy developments, international prices, and futures markets. The FAO Food Price Index is a measure of the monthly change in international prices of a basket of food commodities.

BY: Sara Gustafson, IFPRI

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