The FAO’s monthly report on food price trends was released on July 11. The bulletin reports on recent food price developments 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.
The key messages in this month’s report are that international cereal prices rose in June but are still below June 2015 levels. More specifically, the benchmark US wheat price averaged 198 dollars per tonne in June, which is up almost 3 percent from May but still 18 percent below its level of one year ago. These price increases were mainly driven by supply concerns over harvest delays in South America and excessive rains in the EU, South America, and a number of countries in Africa. Similarly, the benchmark US maize prices averaged around 181 dollars per tonne in June, which is 7 percent higher than it was in May. These increases were mainly due to strong increases in demand and reductions in the export capacity of South America and the Black Sea Region. Overall, the report also highlighted increases in cereal prices in many countries in Africa and in yellow maize
Several countries received domestic food price warnings this month. 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. The countries that received warnings include Argentina, Brazil, Malawi, Myanmar, Namibia, Nigeria, Peru, South Africa, and Swaziland. In Argentina, yellow maize prices increased to their highest levels on record due to strong export demand, inflationary pressures, and a slow harvest. Wheat and wheat flour prices also experienced strong increases. Brazil is currently experiencing high cereal prices due to high inflation and a weak currency. In Malawi, drought has reduced harvests, causing significant increases in the price of maize. In Myanmar, the price of rice (the country’s main staple) reached record levels in June due to two consecutive years of relatively poor harvests. In Namibia, cereal prices have increased by one-third over the past year due to increased import costs. In Nigeria, coarse grain prices increased in June and are at high levels; for instance, millet and sorghum prices are more than 80 percent and 100 percent higher, respectively, than in June 2015. Peru, South Africa, and Swaziland have also all experienced significant increases in the price of maize, a staple in all three countries.
At the sub-regional level, West Africa saw increases in the prices of locally grown millet, sorghum, and maize, the main staples of the sub-region. In the Sahel belt in West Africa, coarse grain prices showed seasonal increases in most markets of Burkina Faso, Niger, and Mali after remaining relatively stable over the past several months. By contrast, in coastal West African countries, prices were significantly higher than at the same time last year in most markets, after consecutive increases in previous months.
In Southern Africa, yellow maize prices increased in June, narrowing the gap with higher white maize prices that, by contrast, declined slightly. Due to a poor harvest, coupled with a weak South African rand, maize prices are likely to remain relatively high. This general high level of international and regional prices for maize has caused strong import inflationary pressure in the import-dependent countries of Lesotho, Namibia, and Swaziland.
In Eastern Africa, the price of locally produced cereals increased in June following seasonal patterns. In Kenya and Ethiopia, maize prices increased but remain below their year-earlier levels due to adequate stocks. In Sudan, on the other hand, prices of locally produced sorghum and millet, the country’s main staples, were about 50 percent higher than their June 2015 levels.
Similarly, in Central America, most countries experienced increases in white maize prices in June. In El Salvador, Guatemala, and Honduras, maize prices rose in June but remained around their June 2015 levels, mainly on account of adequate supplies of imported maize.
In East Asia, smaller 2015-2016 rice harvests continued to support domestic prices in June. In Thailand, rice prices increased further after rising sharply in May and reached some 20 percent above their year-earlier levels as a result of tight domestic supplies following successive poor harvests. In India and Vietnam, however, despite smaller outputs from the recently completed secondary season rice harvests, prices remained steady overall. Rice prices also remained unchanged in China and Cambodia.
In South America, the report highlights that yellow maize prices increased in June and were higher overall than a year earlier. In Argentina, strong exports and high general inflation pushed prices to record levels. In Brazil, harvesting of the 2016 second season crop halted the sharp price increases seen over the past several months, but prices remain well above those of a year earlier. This reflects tight domestic supplies due to reduced first and second season outputs and record exports in the first quarter of the year. High inflation and a weak currency also contributed to these high prices. Increased maize quotations in Argentina and Brazil, key producers and exporters in the region, supported price increases in neighboring countries as well.
All the data used in the analysis can be found in the FPMA Tool .