Latest FAO Food Price Index and AMIS Market Monitor Released
The latest editions of the FAO Food Price Index and AMIS Market Monitor are both now available for September. The FAO Food Price Index is a measure of the monthly change in international prices of a basket of five food commodity groups; the monthly AMIS Market Monitor covers the international markets for wheat, rice, maize, and soy and provides an overview of the market situation and outlook for each of these crops.
The FAO Food Price Index averaged 176.6 points in August, down 2.3 points since July but still 10 points above its value from August 2016. The decline is reflected in lower values for cereals, sugar, and meat, which more than compensated for increases in vegetable oil and dairy prices.
After rising for three consecutive months, the Cereal Price Index was down almost 9 points from July. This decline was due to large global supplies of wheat in the Black Sea region and maize in South America. International rice prices have stayed steady, as slow import demand has offset diminishing availabilities ahead of new crop arrivals.
The Vegetable Oil Price Index averaged 164.4 points; after two consecutive months of decline, the index posted a month-on-month increase of 4.1 points. Soy oil prices rose in response to adjustments in the United States’ biodiesel import policies, which may spur domestic soy oil uptake.
The Dairy Price Index was up 3.1 points from July. Although up 42 percent above its August 2016 values, it is still 20 percent below its peak in February 2014. The global cheese market remained stable, while butter and whole milk powder prices rose and skimmed milk powder prices came down.
The Meat Price Index came down 2.1 points from its revised value for July. The Sugar Price Index is down nearly 3.6 points from July. Favorable prospects for cane harvests n Brazil, Thailand, and India, coupled with weaker international demand due to high tariffs in China and India, attributed to the decline in sugar prices.
The Market Monitor is a product of the Agricultural Market Information System (AMIS). It covers international markets for wheat, maize, rice and soybeans, giving a synopsis of major market developments and the policy and other market drivers behind them.
Supply and demand prospects continue to contribute to a generally comfortable market situation for all AMIS crops in 2017-2018. The latest production forecasts indicate higher global outputs than earlier anticipated, especially for wheat. Due to large carryovers from the previous season, the total supply in 2017-2018 for AMIS commodities is likely to prove more than sufficient to meet projected demand.
Wheat stocks are expected to hit a new high due to increased production by almost 9 million tons following revisions mostly in the Russian Federation. The trade forecast for June and July lifted by almost 3 million tons due to larger import demands from Brazil and India.
Maize production is also reaching new highs, at 5 million tons higher than July, due to larger outputs in Latin American and the CIS. Use is expected to expand by 1.3 percent due to a growth in feed use. Stocks and trade are also on the rise, with large imports by China, the EU, and Mexico and higher than earlier anticipated build-ups in Brazil.
Rice production is experiencing a modest expansion from its 2016 all-time high. Use is up in India and Thailand, and trade will continue at its current pace. Cambodia and China will experience increased exports. Rice stocks will not see much change, as accumulations in rice-importing countries will compensate for draw-downs by major exporters.
Although production forecasts in Argentina and India are down, soybean production is at a near-record level following recent upward revisions for Brazil and the US. Use has not changed much from the last period, confirming below-average growth of 3.5 percent. Trade is on the rise, however, reflecting higher export availability in the US. Stocks are also rising due to higher forecasts for Brazil. Global inventories are only forecast to drop by 1.5 million tons from last season’s all-time record.