FAO Food Price Index, AMIS Market Monitor See Reduction in Price Volatility

The FAO Food Price Index remained stable in November, with increased vegetable oil, dairy, and sugar prices balanced by falling cereal and meat prices. The November 2023 Index was 10.7 percent below its 2022 level.

The Cereal Price Index decreased by 3 percent in November to reach nearly 20 percent below its November 2022 level. Maize prices fell most significantly in November due to increased sales in Argentina and higher seasonal supplies in the U.S. Wheat prices also fell, albeit less sharply, due to ongoing harvests in Russia. Rice prices remained stable in November.

The Vegetable Oil Index rose 3.4 percent in November, driven by increased palm oil and sunflower oil prices. Soy oil prices declined in November due to slowing import demand, which offset reduced production prospects in Brazil.

The Dairy Price Index increased by 2.2 percent, while the Sugar Price Index increased by 1.4 percent. The Meat Price Index declined by 0.4 percent.

The latest AMIS Market Monitor also reflects calming commodities markets. The report notes that grain and oilseed prices, with the exception of rice, are significantly lower than their January 2022 levels and that rice prices have also fallen from their historical summer 2023 highs. Demand for agricultural products is anticipated to reach a record high in 2023-2024; however, the impact of that demand on prices will likely be tampered by lower fuel and fertilizer prices.

The November AMIS editorial article also emphasizes the role of fertilizer prices in the food security and market outlook. While the surges in fertilizer prices in recent years did not have significant impact on global markets, AMIS is calling for improved assessments of fertilizer markets in order to better understand how changes in the fertilizer market affect different crops and regions.

Global wheat production forecasts increased in November, but overall production is still expected to be 2.1 percent below 2022 levels. Wheat utilization forecasts for 2023-2024 also increased due to growth in feed use in the EU. Utilization is now forecast to be 1.8 percent above last year’s level. Global wheat trade expectations remained stable in November, while global wheat ending stocks are expected to be slightly above opening levels.

Global maize production forecasts for 2023 also increased last month due to revisions in the U.S., with total maize production expected to be 4.6 percent higher than 2022. Utilization forecasts remained stable in November, while maize trade forecasts rose slightly due to increased import demand from Mexico and Saudi Arabia and higher exports from Paraguay and Russia. Global maize ending stocks are expected to be 8.5 percent higher than their opening levels.

Rice production forecasts for 2023-2024 rose slightly in November, while utilization expectations remained mostly stable. Rice trade expectations declined due to reduced import demand from China. Global rice ending stocks rose slightly due to higher reserves in both importing and exporting countries.

Soybean production forecasts fell due to reduced production expectations in Brazil and India. Soybean utilization forecasts also declined slightly, with smaller forecasts in Brazil, China, and India balancing higher projected use in Argentina. Global trade forecasts fell slightly as well due to reduced exports from Brazil and reduced imports from China and Indonesia. Global soybean ending stock forecasts declined due to expected stock releases in Brazil and China; however, total soybean ending stocks are still expected to be 9 percent above their opening level.