Photo credit: Flickr: McKay Savage

The FAO Food Price Index fell nearly 3 points in January, signaling a continued decrease in all of the commodities tracked by the Index and a decline of nearly 29 points from January 2015. This continued fall in prices is in part driven by the strong global supply highlighted in this month’s AMIS Market Monitor, along with an appreciating US dollar and lower global oil prices.

Cereal prices last month were down 2.5 points from December. The strongest declines were seen in maize and wheat, while rice saw a more minor decline. In 2015, global wheat production increased by 2.3 million tonnes, largely coming from increased harvests in Canada and Russia. AMIS estimates that 2016 ending stocks will be 3.8 million tonnes higher due to supplies in Argentina, China, Russia, and Ukraine, which are expected to reach their highest levels in 13 years. Global maize production also rose by 2.6 million tonnes in 2015, driven by production in China and Canada that offset slight declines in the EU, Ukraine, and the US. 2016 ending stocks are anticipated to decline by 5.7 percent, based on reduced Brazilian production and lower historical carryover stocks in the EU. Finally, global rice production increased only slightly in 2015, but 2016 ending stocks are still expected to be up based on stocks in China, the US, and several West African countries.

January soybean prices were down 2.4 points from December, due largely to a high expected global supply. Despite the fact that production fell in 2015 due to poor weather conditions throughout Brazil and lower estimated US production, 2016 ending stocks are still anticipated to be larger than last year’s record stocks.

The dairy, meat, and sugar indices also all fell in January (by 4.4, 1.7, and 8.4 points, respectively).

The 2015-16 El Niño weather cycle continues to impact crop conditions across the world, however. In South Africa, severe drought is causing this season’s maize production to be projected 35 percent lower than average. Drought is also expected to continue in Southeast Asia and northern South America. Other parts of South America, such as southeast Brazil and Uruguay, are experiencing strong rainfall, which is expected to continue; rainfall is also anticipated to be above average in the western and southern US. Other parts of the US and Canada will experience drier than average conditions. El Niño is not expected to have any significant impact in Europe or the western Russian Federation.

The AMIS Market Monitor provides a monthly synopsis of major developments in international commodity markets, focusing on wheat, maize, rice and soybeans. It represents the collective assessment of the ten international organizations that form the AMIS Secretariat concerning the international market situation and outlook.

Read more regarding El Niño's regional impacts:
Situación alimentaria y climática en Centroamérica
Perspectiva climática regional hasta marzo 2016
Regional SSA Updates from FEWS.Net
FEWS.Net Report Predicts Flooding for Horn of Africa
Ethiopia Facing Severe Drought
Ethiopia’s 2015 Drought: No Reason for a Famine
High Temps and Dry Conditions Delay Planting, Raise Production Concerns
India Experiences Driest Monsoon in Six Years
Warmest Months on Record

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