Food Price Index Stable in September But Rice Prices Remain a Concern

The FAO Food Price Index remained virtually unchanged month-to-month in September and almost 24 percent lower than the peak reached in March 2022.

The Cereal Price Index rose 1 percent in September but remained nearly 15 percent below its September 2022 levels. Maize prices rose by 7 percent after falling for seven consecutive months based on increased demand and slower sales in several regions. Wheat prices declined by 1.6 percent due to improved production prospects in Russia. Rice prices also declined marginally month to month but remained almost 28 percent higher than their September 2022 levels. Uncertainties remain regarding the impact of India’s recent export restrictions on non-Basmati rice.  

The Vegetable Oil Index fell by 3.9 percent in September, with prices falling for palm, sunflower, soy, and rapeseed oils. Abundant production and export supplies contributed to the decline for all vegetable oil commodities, in spite of strong demand for soy oil for biodiesel use.

The Dairy and Meat Price Indices fell by 2.3 and 1 percent, respectively, while the Sugar Price Index rose by 9.8 percent.

The latest AMIS Market Monitor also emphasized the potential impacts of India’s export ban and subsequent high rice prices on food security in Asia and worldwide. Myanmar recently announced new rice export licensing requirements, which could impact supplies coming out of the world’s sixth largest rice exporter. According to AMIS, the upcoming El Niño phenomenon could hurt rice production in Asia and push rice prices even higher, exacerbating the harmful impacts of these trade policies. Agricultural markets could be even further negatively impacted by high and rising interest rates.

Global 2023 wheat production prospects increased in September due to higher than anticipated yields in Ukraine and Russia; however, production is still expected to be 2.3 percent below 2022 levels. Wheat utilization forecasts fell slightly month to month but are expected to be above the previous year’s level due to rising food use. Global wheat trade for 2023-24 is still expected to decline, while global ending stock prospects increased slightly in September, again due to higher production in Ukraine and Russia.

Maize production forecasts for 2023 increased slightly in September, with production expected to be 4.3 above 2022 levels. Maize utilization prospects remained unchanged in September; increased feed use is expected to raise utilization by 1.6 from the previous year. Trade is expected to fall by 1.6 percent, on the other hand. Global maize ending stock prospects increased slightly in September, with stocks expected to be 6.8 percent above opening levels.

Global rice production prospects were unchanged in September, while utilization forecasts still see decreased non-food use balancing growing food use to result in stable levels from 2022. Rice trade expectations fell in September due to lower imports by Africa. Global rice ending stocks are now expected to be 1.7 percent above 2022-23 levels – a new peak.

Soybean production prospects for 2023-24 fell in September due to unfavorable growing conditions in the US. Utilization forecasts increased slightly, with overall utilization expected to increase by 6 percent from 2022. Soybean trade forecasts fell due to expected smaller shipments from the US and decreased imports by China. Global soybean ending stocks are still expected to be 12 percent above opening levels despite a slight decrease in September.

Fertilizer prices rose for the most part in September due to a strong Indian market and potential export restrictions in Chinese. Urea, ammonia, and phosphorus fertilizers all increased in price, while potash prices declined slightly in Brazil and remained stable globally. Natural gas prices also saw increases in September.