Photo Credit: CIAT

The FAO Food Price Index rose by 1.1 percent in March, marking the second consecutive month of increases. Cereal and dairy prices drove the price increase, while the prices of sugar and vegetable oils fell slightly. The Index for March 2018 is 0.7 percent above its year-earlier level.

The Cereal Price Index rose 2.7 percent in March; this increase brought the Index 12.1 percent higher than its March 2017 level. Stronger global prices for nearly all major cereals have driven the Index up continuously for several months. For wheat, concerns over weather in the United States and parts of Europe have lifted quotations, while for maize, price increases have been driven by a combination of strong global demand and deteriorating crop forecasts, particularly in Argentina. Strong demand from Asia has also kept rice prices high.

The Vegetable Price Index fell marginally in March, with modest price decreases for soy, rapeseed, and sunflower oils offset by higher palm oil prices. Strong global demand and subsequent lowered inventory in Malaysia and Indonesia, coupled with the EU’s potential resumption of imports of palm oil-based biofuels from Indonesia, drove the price increase for that commodity.

The Dairy Price Index rose by 3.3 percent in March, while the Meat Price Index remained virtually unchanged. The Sugar Price Index declined by 3.4 percent.
The latest AMIS Market Monitor was also recently released, citing adequate supplies of soybeans, wheat, maize, and rice in 2018-2019.

Wheat production in 2017 reached just 0.3 percent below the record crop seen in 2016. Utilization in 2017-2018 increased due to higher-than-expected industrial use in the EU and feed use in the Russian Federation. Global wheat ending stocks, while slightly down from the previous month’s forecast, remain at an all-time high.

Reported maize production for 2017 increased in March due to significant upward revisions from the EU. Utilization in 2018-2019 also increased due to high feed use in the EU and South America, but ending stocks remain at record highs.

Reported rice production also rose as a result of improved prospects from India. Rice utilization forecasts for 2018-2019 fell slightly, and global stocks (ending in 2018) reached 1.4 percent above their opening levels; however, aggregate stocks in some major exporting countries are expected to contract.

Soybean production for 2017-2018 fell slightly based on reductions in Argentina; utilization forecasts also fell slightly due to lower crushing forecasts in Argentina and Brazil. The global 2017-2018 stock forecasts fell sharply in March, suggesting a four-year low. This decline is due mostly to sharp downward revisions in stocks in Argentina and Brazil, which are only partially offset by increased stocks in the United States.

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