International Maize, Wheat, Rice Prices Remain Down, According to Latest FPMA Report
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The latest Food Price Monitoring and Analysis (FPMA) Bulletin from GIEWS, released on December 9, reports mixed but low trends for global wheat prices in November. Benchmark US Wheat (No. 2 Hard Red Winter) prices fell slightly from October and remain nearly 10 percent below November 2015 levels. This decline was driven by higher 2016 production and ending stock estimates, as well as a strong US dollar; however, falling prices slowed somewhat due to unfavorable 2017 weather forecasts in several wheat-producing countries coupled with strong import demand. Argentina’s wheat prices also declined significantly in November, but prices rose in the Black Sea region due to high import demand and concerns about grain quality.
Global rice prices were also mixed in November, according to the report. In Thailand, prices fell by nearly 2 percent from October driven by slow sales and good production; similarly, prices in India declined as a result of favorable harvests. Rice prices rose in Pakistan due to higher export sales and in Vietnam as a result of heavy rains that delayed harvests.
November’s maize prices, although virtually unchanged from October, remained well below their year-earlier levels. Expected record production in the US, the world’s largest maize exporter, drove that country’s maize prices down 8 percent from November 2015, although this decline was partially offset by strong import demand. Maize prices also fell in Brazil, reflecting a favorable outlook for the country’s first 2017 harvest.
Several countries received domestic food price warnings this month. These warnings mean that the price of one or more basic food commodity are at abnormally high levels that could negatively impact access to food. Prioritized FSP countries that received warnings this month include: Argentina, Malawi, Nigeria, Uganda, and Zambia.
In Argentina, yellow maize prices rose for the second consecutive month. This increase put prices at double their November 2015 levels and close to the record levels seen in July 2016. Rising maize prices have been supported by a weak local currency and expected record export levels following the government’s removal of export restrictions. The area planted to maize is also expected to increase to a record level for the 2017 harvest. Argentina’s wheat prices also remain much higher than their November 2015 level – nearly 50 percent higher for wheat grain and 70 percent higher for wheat flour. These high prices are being driven by the weak local currency and strong import demand.
The national average maize price in Malawi fell in October as a result of the government’s procurement and sale of subsidized grain from Zambia. However, the country’s maize prices remain almost 50 percent higher than in November 2015, due to severe drought and subsequent low production, particularly in the southern areas of the country.
While cereal prices in Nigeria declined or stayed relatively stable in October, they remain at record or near-record highs due to a weak national currency and continuing civil conflict that has disrupted markets. Increased regional import demand for Nigerian cereal has increased the country’s exports, placing pressure on domestic food supplies. At the same time, rising domestic fuel and input costs have reduced cereal imports into Nigeria.
Uganda’s maize prices rose sharply in November, driven by localized production shortfalls of the June-July crop and concerns over forecast dry weather conditions that could affect planting and crop development in the coming months. In some markets, wholesale maize prices increased by 20 percent, reaching near-record highs.
Finally, in Zambia, maize grain and maize meal prices rose by around one-quarter from November 2015 levels, and the price of meal products reached record highs. The country’s domestic maize supply remains tight after strong exports and a record 2015 crop. The government of Zambia has revoked all maize export permits as of October 2016, with the exception of grains exported for humanitarian purposes (such as those that went to Malawi).
The FPMA bulletin reports on recent food price developments 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. All the data used in the analysis can be found in the FPMA Tool .
By: Sara Gustafson, IFPRI