FAO Food Price Index Rises Slightly, But Remains Significantly Lower than April 2023

The FAO Food Price Index rose marginally in April but remained 7.4 percent below its April 2023 level. The slight increase was driven by rising meat, vegetable oil, and cereal prices.

The Cereal Price Index rose by 0.3 percent from March but remained over 18 percent below April 2023 prices. Wheat prices stabilized in April after three months of decline; concerns over crop conditions in several reasons were balanced by strong export competition. Maize prices rose more strongly based on increased import demand, trade disruptions stemming from infrastructure damage in Ukraine, and falling production expectations in Brazil. Rise prices fell by 1.8 percent in April.

The Vegetable Oil Price Index also rose by 0.3 percent in April to reach a 13-month high. The increase was driven by sunflower and rapeseed oil prices, which both rose due to strong imports and concerns over weather conditions in Europe. Palm and soyoil prices both declined slightly in April, on the other hand. Soyoil prices fell based on favorable production in South America, while palm oil prices were driven down by higher outputs in some production countries and slightly lower import demand.

The Meat Price Index rose by 1.6 percent in April, while the Sugar Price Index and Dairy Price Index fell by 4.4 percent and 0.3 percent, respectively.

The latest AMIS Market Monitor is looking ahead this month to the potential impacts of a likely La Niña event in the coming months, including continuing extremely high global temperatures and changing precipitation patterns. These events historically have resulted in below average global soybean yields and above average global rice yields; however, the report points out that no two events are the same and that the existing high global temperatures driven by both climate change and the 2023-2024 El Niño event could increase the potential negative impacts.

Global wheat production forecasts for 2023 remained 2.3 below 2022 levels in April, while utilization forecasts are expected to be nearly 2 percent above the previous year. Global wheat trade expectations for 2023-2024 increased in April based on larger-than-anticipated exports and strong import demand. Global wheat ending stocks are still expected to be below opening levels.

Global maize production expectations rose slightly in April based on higher estimates in several countries; total production for 2023 is expected to be 5.5 percent above 2022 levels. Maize utilization forecasts also increased in April, with total utilization expected to be nearly 2 percent above the previous year. Maize trade is still forecast to increase by 3.2 year-on-year due to increased purchases by China and increased sales by Argentina, Brazil, and the U.S. Total maize ending stocks are expected to be 9.1 percent above opening levels.

Global rice production forecasts for 2023-2024 increased significantly in April, driven largely by a historical output revision for Myanmar. Utilization forecasts also increased month-on-month, but total utilization is expected to fall from 2022 levels. Global rice trade forecasts remained stable, while global rice ending stocks increased slightly from March.

Soybean production forecasts and utilization forecasts both increased slightly in April. Global soybean trade expectations also increased due to higher forecast imports by China and exports by Argentina. Total soybean ending stocks are now expected to be 10 percent above opening levels.

Fertilizer prices in most markets remained stable in April. AMIS expects continued subdued prices in the coming months due to seasonal declines in demand in the Northern Hemisphere. While natural gas prices saw volatility in some areas, supplies remained ample in April; prices fell in the U.S. Ammonia prices rose slightly due to limited availability in some regions, while global urea prices fell due to slowing import demand and ample global supplies. The potential economic impact of tensions in the Middle East, however, remains a concern for nitrogen prices and supplies in the coming months. Global phosphorus fertilizer prices are expected to fall due to seasonally slowing demand. Potash prices increased in Brazil due to higher demand, but slow demand in other regions coupled with ample supplies is expected to keep global prices stable.