Uncertainties over Trade Continue to Raise Concerns for Food, Fertilizer Markets

The FAO Food Price Index rose 1 percent in April, driven by increasing cereal, dairy, and meat price. While the Index was 7.6 percent higher than its April 2024 level, it remains nearly 20 percent lower than the record reached in March 2022.

The Cereal Price Index rose 1.2 percent in April but remained below its April 2024 level. Uncertainty regarding trade policy helped to limit the increase. Wheat price increases were driven by reduced export supplies from Russia and a weakening U.S. dollar. Maize prices were also driven up by currency movements, as well as seasonal reductions in stocks in the U.S. Rice prices rose by 0.8 percent due to rising demand.

The Vegetable Oil Price Index fell 2.3 percent in April but remained more than 20 percent above its April 2024 level. Palm oil prices fell due to increased export supplies. Soybean oil prices, on the other hand, rose due to strengthening import demand and seasonal reductions in supplies.

The Meat and Dairy Price Indices also rose in April by 3.2 and 2.4 percent, respectively. The Sugar Price Index fell by 3.5 percent.

The latest AMIS Market Monitor  continues to emphasize how uncertain and rapidly changing trade policies could impact energy prices and agricultural production and trade.  This month’s featured article focuses on fertilizer markets and trade and calls for enhanced transparency to ensure more stable, less volatile markets.

Wheat production forecasts remained stabled in April, with 2024 production expected to remain below the peak seen in 2022. Wheat utilization forecasts increased due to increased use in several regions, while trade expectations fell due to slowing import demand and lower exports from Russia. Global wheat ending stocks are still expected to be slightly above opening levels.

Maize production forecasts fell in April, with 2024 production levels expected to be 2.1 percent below the previous year. Maize utilization forecasts also fell slightly in April, but overall utilization is still expected to be above 2023 levels due to increased feed use. Maize trade is forecast to fall by 8 percent in 2024 due to lower import demand from China and lower exports from several regions. Global maize ending stocks are expected to be nearly 7 percent below their opening level.

Rice production expectations remained largely stable in April, while utilization forecasts increased slightly due to higher-than-expected use in Africa. Global rice trade forecasts increased slightly as well due to higher expected exports from several regions. Global rice ending stocks are expected to reach record highs in 2024.

Forecasts for both global soybean production and soybean utilization rose slightly in April. Trade expectations also rose due to higher forecast exports by Brazil; however, overall global trade is expected to remain stagnant from 2023. Global soybean ending stocks are expected to reach record highs.