Photo Credit: Mitchell Maher/IFPRI

The FAO’s monthly report on food price trends was released this week. 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.

International wheat prices followed mixed trends in May, increasing in North America and the European Union due to unfavorable weather developments but declining slightly in the Black Sea region and Argentina. Export prices of maize remained generally unchanged, while rice quotations were underpinned by strong demand.

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 in those areas.

In Bangladesh, rice prices rose to record highs in May, reflecting tighter supplies from reduced production and imports in 2016, along with flood-related damages to the 2017 crop. There was also an increased demand heading into Ramadan. The government announced that it would import up to 600,000 tons of rice, but it would not reduce the import duty on rice in order to protect local farmers.

In Ethiopia, maize prices continued to increase, but at a slower pace than the previous two months. Prospects for the upcoming secondary season are high after some recent abundant precipitation. Similarly, prices of teff rose up to 30 percent higher than May 2016. Wheat prices also increased but remained generally around or below their 2016 levels, reflecting adequate volumes of imports and a good 2016 output.

In Niger, coarse grain prices increased sharply and remain at high levels, despite the bumper 2016 harvest. This is due mainly to production shortfalls in some departments, large institutional purchases, and restrictions of cereal imports from Nigeria. Ramadan and ongoing insecurity in some areas added further upward pressure.

In Nigeria, maize, millet and sorghum prices all increased, rising beyond the already high levels seen over the past few months. The onset of the lean season and stronger domestic demand due to Ramadan all exacerbated the general upward pressure provided by the substantial depreciation of the local currency. Prices for white gari, a staple food made from cassava, reached an all-time high in April. High fuel and transportation costs, as well as unrest in the northern part of the country, contributed to the general increase in Nigeria’s food prices. Despite a further upsurge in food inflation, relative stability in the exchange rate contributed to a further slowdown in general inflation.

In Uganda, maize prices continued to rise and were at record high levels in all monitored markets, double their levels from May 2016. Tight supplies from reduced output in 2016 and concerns over the performance of the June harvest have both contributed to the increase. The country has also received below-average precipitation in 2017, and a fall armyworm outbreak is expected to cause a 10 percent reduction in yields. In the capital city of Kampala, retail prices of beans and cassava flour, important staples in the local diet, have risen by one-third since January 2017.

Tanzania, meanwhile, is experiencing a decline in maize prices; however, maize price levels are still very high, double the amount of their year-earlier values. This reflects reduced supplies due to erratic rainfall, which led to drought last February in the northern and eastern bi-modal rainfall areas. Sustained demand from neighboring countries and high fuel prices also impacted prices.

By: Jenn Campus

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