The June FAO Monthly Report on Food Price Trends saw mixed trends for international wheat prices in May, but prices generally remained lower than May 2015. The benchmark US wheat price averaged USD 193 per tonne in May; this was down four percent from April and 17 percent below its May 2015 level. The report cites that this drop in price is due mainly to improved global 2016-2017 production prospects. Prices for EU (France), Black Sea, and Argentina wheat all rose slightly in May (by 2.3, 4, and 1.6 percent, respectively), but as noted, remain well below May 2015 levels. The price increases for Black Sea wheat represent seasonal trends, while the increases in EU and Argentina were supported by strong export demand.

Maize export prices generally increased in May, with the benchmark US maize price rising 3 percent to USD 169 per tonne. This is almost 2 percent above May 2015 levels. Tightening export supplies and strong import demand drove this trend, according to the report. Production prospects in Brazil have deteriorated in recent months due to dry weather conditions; in addition, harvests have been delayed in Argentina due to weather.

Rice prices rose in May by the largest month-on-month gain since February 2014 due to higher export quotations for both Indica and fragrant rice. The benchmark Thai 100% B white rice price rose by 11.7 percent, reaching its highest level since August 2014. Prices also rose in Pakistan, India and South America; increases in these prices are being driven by tightening supplies. In Vietnam and the United States, on the other hand, prices decreased slightly due to recent harvests.

Several of the Food Security Portal’s prioritized countries received domestic price warnings in this month’s report. In Argentina, yellow maize prices reached record levels in May due to strong export demand, a weak local currency, and the recent elimination of export taxes. Delayed harvests and concerns about crop quality have further supported price increases.

Yellow maize prices also reached record highs in Brazil after several months of high exports and high domestic demand for feed tightened supplies. While wheat prices remained unchanged in Brazil in May, they are still almost 30 percent above their 2015 levels, reflecting a reduced 2015 crop and increased demand for feed to replace yellow maize.

Maize meal and bean prices are also both higher than their 2015 levels. Drought impacted 2015 production of these crops, leading to reduced supplies; the depreciation of the local currency also supported higher food prices. Imported rice prices, on the other hand, declined in the capital city; however these also remained above their 2015 levels.

Malawi experienced seasonal declines in maize prices for the third consecutive month. However, this season’s price declines were at a lower rate than that seen in previous months, and prices remain above their 2015 levels due to drought and reduced 2016 production.

Coarse grain prices in Nigeria continue to rise and are 50 percent higher than May 2015; sorghum prices have reached record levels. The ongoing depreciation of Nigeria’s currency has underpinned the high prices of both domestic and imported food. Rice prices in Nigeria have also risen in the past month due to recent import restrictions, increased fuel and transportation costs, and ongoing conflict in the northern regions of the country. In late April, the government announced the release of 10,000 tonnes of grain from the National Strategic Grains Reserve to lower food prices.

By: Sara Gustafson, IFPRI

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