The FAO Food Price Index rose slightly in April; but remains almost 20 percent below its April 2022 level. Sharp increases in the price of sugar drove the majority of the month-to-month increase.
The Cereal Price Index fell by 1.7 percent in April and was also almost 20 percent below April 2022 levels. Wheat prices fell to the lowest level seen since July 2021 due to increased export supplies from Russia, the extension of the Black Sea Grain Initiative, and favorable weather conditions throughout Europe. Maize prices also declined by around 2 percent due to harvests in South America and an expected record production year in Brazil. Rice prices were the outlier, rising in April based on higher than anticipated demand in Asia.
The Vegetable Oil Price Index also declined by just over 1 percent in April. Palm oil prices remained generally stable due to slowing import demand that balanced out limited supply. Soybean prices fell in April; this decline was driven largely by an anticipated record crop in Brazil.
Most of April’s increase in the overall Food Price Index stemmed from sugar prices, which surged by almost 18 percent due to a combination of lower-than-expected output in key producing countries, currency depreciation in Brazil, and high crude oil prices. Sugar prices are now at the highest level seen since October 2011. The Dairy Price Index fell by almost 2 percent in April, while the Meat Price Index rose slightly.
The latest AMIS Market Monitor also highlighted rising rice prices following relatively stable prices over the past 12 months. The potential for further negative impacts on rice production in Asia from the coming El Niño pattern (expected to begin in June 2023) could mean further price increases in the coming months. Maize and wheat production could also be impacted by the weather pattern, although these impacts will be more mixed, with some producing regions seeing benefits and others experiencing production declines.
Wheat production totals for 2022 were increased last month, with global totals expected to be almost 3 percent above their 2021 levels. Wheat utilization prospects also increased due to higher utilization rates in India and the EU. Wheat trade forecasts increased, with higher purchases by the EU and China and higher sales by Russia. Global wheat ending stocks are still expected to be 5.2 percent above their opening levels.
Maize production prospects for 2022 rose slightly in April but total production is still expected to be around 4 percent below 2021 levels. Maize utilization forecasts held steady, with utilization expected to fall by 1.5 percent from 2021-2022. Trade is forecast to fall by 2.2 percent from 2021-2022, while global maize ending stock forecasts rose in April due to increased reported inventories in several countries.
Rice production forecasts rose in April, as did utilization prospects. Total rice utilization is still expected to be slightly below the record high seen in 2021-2022. Rice trade prospects rose slightly due to increased import prospects in the Philippines and Vietnam. Global rice ending stock forecasts remained steady, with total stocks expected to be around 1 percent below their opening levels.
Soybean production forecasts fell for the third consecutive month in April. Soybean utilization forecasts also fell, with slowing consumption growth and reduced crushings in several producing countries. Trade forecasts increased slightly, while global soybean ending stock expectations remained steady.
Fertilizer prices varied in April, but overall remain lower than their April 2022 levels due to adequate global supplies. Natural gas prices fell based on reduced demand and strong inventories. Ammonia prices declined as well, driven by slowing demand and lower energy prices delaying major purchases. DAP prices fell in markets outside the U.S. but increased in that country’s markets due to strong demand and lower inventory. These factors also helped drive increased urea prices in the U.S.; this shift could impact urea prices in other regions in the coming months, but global supplies remain adequate. Potash prices followed the trend seen for DAP, rising in the U.S. and falling elsewhere in the world due to strong international inventories.