FAO’s October report on food price trends was released this 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 this month’s report, international wheat, maize, and rice prices all fell in September and are at generally low levels. For wheat, this decline was driven by large export availabilities and strong international competition. Improved crop prospects in Argentina and a decline in prices in the European Union offset concerns about crop quality in Canada and Australia. Maize prices also fell for the third consecutive month and are at their lowest level in nine years. Excellent supply prospects have been the major driver behind falling maize prices. Rice prices are also at a long-time low, the lowest since January 2008. Export prices fell in most of the world’s major producing areas due to good harvest prospects and slow pace of sales.
Despite the low international cereal prices, several countries did receive domestic food price warnings this month, however. These warnings mean that the price of one or more basic food commodity are at abnormally high levels that could negatively impact access to food.
In Argentina, yellow maize prices remained at high levels in September due to a weakening of the national currency and strong export demand. Maize exports in March-February of the coming year are expected to reach record levels, which could drive domestic prices even higher. Wheat prices, while declining sharply in September, still remain 80 percent above their September 2015 levels in Argentina, due again to strong export demand and a weak currency.
Bangladesh saw record rice prices in September due to tight domestic supplies and reduced imports. In response to these high prices and to help poor consumers, the Government of Bangladesh has launched a new social safety net program, “Food-Friendly Programme for the Ultra-Poor.” The program targets some 5 million poor families across the country and supplements the country’s existing social safety net schemes.
Rice prices in Brazil also hit record levels in September after several months of steady increases. The 2016 domestic rice output is estimated to be 15 percent lower than last year’s levels; combined with low domestic inventories, these reduced prospects have driven prices up. Maize prices in Brazil declined in September but remain significantly higher than last year’s levels due to high exports earlier in the year and reduced harvests as a result of dry weather.
Malawi’s maize prices fell slightly in September due to increased imports and food assistance programs, but they also remain higher than last year’s levels. El Niño-induced drought significantly reduced 2016 harvests, particularly in the southern areas of the country. For example, in Chikhwawa, maize prices were 26 percent higher than the national average in September.
In Nigeria, coarse grain prices reached record highs in August (the most recent month in which data was available). Sorghum prices were more than 215 percent higher than their August 2015 levels, and millet and maize prices were almost three times higher than last year. The sharp depreciation of the Nigerian Naira, caused by declining oil revenues and the Central Bank’s decision to allow the exchange rate to float, have continued to add upward pressure to prices, as have reduced grain imports and stronger sub-regional import demand.
All the data used in the analysis can be found in the FPMA Tool .
By: Sara Gustafson, IFPRI