Photo Credit: Neil Palmer (CIAT)

The FAO’s monthly report on food price trends was released last week. The bulletin reports on recent food price developments over the past month 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.

According to the latest report, global wheat prices declined overall in April, driven by ample global supplies and a generally favorable outlook for 2017 production. Maize prices also declined in April due to expected bumper harvests in the southern hemisphere. Some countries in the northern hemisphere, however, have experienced planting delays due to recent heavy rains; these delays limited the decline in maize prices. Global rice prices rose in April due to increased global trade activity, particularly increased sales to the Near East. Vietnam was the exception; rice prices fell in Vietnam in April due to a good harvest and a lack of government sales.

Several countries received domestic food price warnings this month. These warnings mean that the prices of one or more basic food commodity are at abnormally high levels, which could negatively impact access to food. The countries that received domestic warnings included Bangladesh, Ethiopia, Kenya, Nigeria, Peru, Uganda, and Tanzania.
In Bangladesh, rice prices reached record levels in April. Rice prices have been rising in the country for the past three months, driven in part by seasonal trends and in part by flash floods in late March and early April that devastated the main 2017 harvest (which accounts for 55 percent of annual production). These months of rising rice prices follow on steep 2016 prices, when reduced harvests and higher duties on rice imports caused almost sustained price increases from June through the end of the year. In April, coarse rice prices were almost 50 percent higher than their April 2016 levels. The Government of Bangladesh has responded with plans to reduce the rice import duty.

Ethiopia saw continued maize price increases in April, with prices in most monitored markets reaching 48 percent higher than their April 2016 levels. Seasonal trends are partially responsible for this increase, but dry conditions and an infestation of fall armyworm in some areas have also raised concerns for the 2017 belg harvest. Wheat prices experienced a less dramatic increase in April and are still down from their year-earlier levels thanks to adequate imports and a good 2016 harvest. Teff prices have increased consistently since January.

In Kenya, both maize and bean prices continued their climb in April, reaching record or near-record levels in almost all monitored markets. The failure of the previous rainy season led to a significantly reduced short-rains harvest, and concerns about continued dry weather and the effects of fall armyworm have driven prices up even further. In addition, imports from neighboring Uganda and Tanzania have been both lower in volume and higher in price.

Maize, millet, and sorghum prices remained stable or declined in Nigeria in March (the latest month for which data are available); however, they remain at high levels. Imported rice prices increased slightly in March, reaching 55 percent higher levels than those seen in March 2016. Continuing high transport costs, ongoing conflict, and lower import volumes and increased exports – mainly driven by the weakened Nigerian Naira – all continue to keep food prices in Nigeria at extremely high levels. In response, the Government of Nigeria banned maize exports in September 2016 and instituted several policies in February that aim to finance the use of agricultural inputs and improve food distribution throughout the country.

Wholesale rice prices in Peru reached record highs in April, driven by strong domestic demand and an expected decline in 2017 rice production. Dry conditions and coastal flooding late in 2016 hampered the rice cropping season. As a result, 2017 rice imports are expected to increase. However, the peak of the harvest (May/June) is expected to lower prices.

Maize prices also reached record highs in Uganda in April, climbing to more than twice their April 2016 levels. Reduced 2016 harvests and concerns over early 2017 crops drove the increase; dry conditions and fall armyworm infestation are expected to impact the first 2017 harvests, especially in the central and western areas of the country. The wholesale prices of beans and cassava – two other important staple foods – also rose in the Kampala market in April, climbing 40 percent over the past three months.

In Tanzania, maize prices also reached record levels in April in all monitored markets. Severe drought at the end of 2016 significantly reduced the vuli harvest, which ended in February 2017. In addition, variable rainfall in recent months has led to concern about the upcoming harvest season as well, and strong demand from neighboring countries and increased transport costs (driven by rising fuel prices) have further strengthened maize prices. However, bean prices in the Dar es Salaam market (which accounts for more than 50 percent of the country’s rice consumption) fell in April.

All the data used in the analysis can be found in the FPMA Tool.

By: Sara Gustafson, IFPRI

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