Blog Post

Global Crop Prices Below Last Year's Levels, Some Spikes at the Country Level

International cereal prices remain significantly below last year’s levels due to abundant global supplies and strong export competition, says the latest Food Price Monitoring and Analysis Bulletin from FAO. The benchmark US wheat price was $214 per tonne in January, while the benchmark US maize price averaged $161 per tonne in January. Rice prices were slightly more varied depending on their origin; prices rose slightly for Thai 100%B white rice but fell for rice from Vietnam, India, and the US. These trends echo findings from this month’s FAO Food Price Index .

Regionally, the story is more mixed. Grain prices continued to decline in most West African countries, but maize prices have soared throughout southern Africa, particularly South Africa and Malawi. The latter country saw record maize prices in January, due largely to a reduced 2015 harvest. Harvests throughout southern Africa continue to be impacted by ongoing drought .

In Central America and the Caribbean, white maize prices rose dramatically in January despite adequate second-season harvests. Severe drought reduced output of the primary harvest season, resulting in very tight market supplies. In Nicaragua, for example, January white maize prices were almost 50 percent higher than those seen in January 2015. Red bean prices fell throughout much of the region, but remain higher than the previous year’s levels in the Dominican Republic. Black bean prices remained generally unchanged in Guatemala and Mexico, although they are still higher than last year’s prices; in Haiti, black bean prices are at nearly double their 2015 price in some areas.

Major producers in South America are also experiencing some weather-driven price shocks. Reduced 2015 wheat yields and depreciating currencies have sent wheat prices upward in recent months in several countries, including Argentina, Brazil, Colombia, and Bolivia. In Chile, on the other hand, prices of wheat and wheat flour remained largely unchanged in January due to a good 2015 harvest. Yellow maize prices generally increased in January, reaching record levels in Argentina and Brazil. Prices remained stable in Chile, Ecuador, and Colombia; in this latter country, however, prices are still well above the levels seen last year.

In India, rice prices remained generally steady in January due to purchases for the government’s food procurement program. Wheat prices also remained steady in the country, due again to a release of stocks through the government’s Open Market Sales Scheme. In Bangladesh, rice prices increased slightly, while they decreased slightly in Vietnam due to reduced exports and the release of government stocks. Wheat flour prices also fell in Bangladesh in January, reaching levels well below those seen last year.

The FAO report records several domestic price warnings. These warnings are included when one or more of a country’s basic food commodity is seeing abnormally high levels that could potentially have negative effects on food security. This month’s warnings impact Brazil, Argentina, Haiti, Honduras, Malawi, South Africa, Tanzania, and Zambia for maize, Indonesia for rice, and the Dominican Republic for beans.

By: Sara Gustafson, IFPRI