What's New

The FAO Food Price Index declined somewhat in September, falling 1.4 percent from August to an average of 165.4 points. This represents a 7.4 percent decline from September 2017 levels.

The Cereal Price Index fell by 2.8 percent from August. Maize prices saw the most significant month-to-month reduction, falling by around 4 percent due to ample global supplies and prospects for a large U.S. crop. Wheat prices also declined in September due to strong exports from Russia. Rice prices experienced the smallest decline (1 percent) due in part to an appreciation of the Thai Baht.

After many years of rapid growth, serious trade tensions have emerged between the United States and China. Since open trade is key to avoiding significant economic and environmental costs and help ensuring food security and nutrition, the ongoing trade conflicts have the potential for disastrous outcomes, as China and the US are key players in global agricultural trade.

The challenges facing global food security continue to increase, driven by ongoing conflict and climate shocks. According to the 2018 State of Food Security and Nutrition in the World Report (released last week by FAO, IFAD, UNICEF, WFP, and WHO), 821 million people were undernourished around the world in 2017; this represents a further rise from the 815 million estimated by the 2017 report. This troubling rise in undernourishment reverses progress seen over the past decade.

The FAO Food Price Index remained virtually unchanged in August, although cereal prices rose as a result of declining crop prospects. At 167.6 points, the Index is around 9 percent lower than its August 2017 levels.

Both hard wheat and soft wheat prices are experiencing a period of excessive volatility, according to the Food Security Portal’s Excessive Food Price Variability Early Warning System. Hard wheat futures prices on the Chicago Board of Trade began experiencing excessive volatility earlier in August, while soft wheat prices began to see excessive movement toward the end of the month. According to the Wall Street Journal, Chicago wheat futures reached a three-year high in early August. This surge was quickly followed by a decline in prices.