#6 BULLETIN 10 July 2017 Food Price Monitoring and Analysis MONTHLY REPORT ON FOOD PRICE TRENDS KEY MESSAGES CONTENTS INTERNATIONAL CEREAL PRICES ............................. 2 DOMESTIC PRICE WARNINGS .................................. 3 ↗ International wheat prices generally increased in June on quality WEST AFRICA ........................................................... 7 concerns amid unfavourable growing conditions for the 2017 crops SOUTHERN AFRICA .................................................. 8 in some key producing countries. Export prices of maize remained EAST AFRICA .......................................................... 10 generally unchanged, while rice quotations continued to increase EAST ASIA .............................................................. 12 mainly on account of strong demand. CIS - ASIA AND EUROPE ......................................... 14 CENTRAL AMERICA AND THE CARIBBEAN ............. 16 ↗ In East Africa, cereal prices either remain stable or declined in June with SOUTH AMERICA ................................................... 17 the new 2017 harvests, but remained at near-record levels in several countries. Prices increased sharply in the past several months, due to tight supplies because of drought-reduced 2016 second season crops and concerns about the overall performance of this year’s harvests following poor rains and crop pests. ↗ In Asia, sustained demand further underpinned domestic prices of rice in exporting countries in June. Elsewhere in the subregion, rice prices rose further and reached record highs in Bangladesh, reflecting losses incurred in the 2017 main season crop, coupled with reduced production and imports in 2016. In Sri Lanka, an anticipated reduction in the 2017 output continued to support prices of rice. Domestic price warnings Price warning level: High Moderate [Based on GIEWS analysis] Bangladesh | Rice Burundi | Maize Ethiopia | Maize Kenya | Maize Niger | Coarse grains Nigeria | Staple foods Rwanda | Maize Somalia | Coarse grains South Sudan | Staple foods Sri Lanka | Rice Uganda | Maize Warnings are only included if latest available price data is not older than two months. The designations employed and the presentation of material in the map do not imply the expression of any opinion United Republic of Tanzania | Maize whatsoever on the part of FAO concerning the legal or constitutional status of any country, territory or sea area, or concerning the delimitation of frontiers. GIEWS - Global Information and Early Warning System on Food and Agriculture INTERNATIONAL CEREAL PRICES Wheat and rice prices increased in June, those of maize generally unchanged International prices of wheat generally strengthened in June. The benchmark improved weather. In the Black Sea region, maize prices kept a firmer tone on US wheat (No.2 Hard Red Winter, f.o.b.) price increased for the second account of sustained demand, while in South America, quotations declined consecutive month and at a steep rate, averaging USD 226 per tonne, with the ongoing harvest of the 2017 crops, anticipated at a bumper level. 13 percent higher than in May and about 14 percent above its level in the The FAO All Rice Price Index (2002-04=100) rose for the seventh corresponding month last year. Seasonal pressure from the 2017 winter wheat consecutive month in June and reached 209 points, up 4 percent from its harvest was more than offset by reports of low grain quality this year, implying value a month earlier. Export prices registered further increases in all the a reduced availability of premium grade milling wheat, and deteriorating spring major Asian origins during June, as suppliers remained busy meeting the wheat conditions due to hot and dry weather. Less than ideal conditions in other rush in orders placed by countries such as Iraq, the Islamic Republic of Iran key-growing countries in the Northern Hemisphere and in parts of Australia and Bangladesh in recent weeks. Expectations of additional purchases by the also provided support. In Argentina, wet conditions hampering plantings of Philippines, Sri Lanka and Bangladesh tended to accentuate gains. It was only the new crop contributed to the month-on-month price increase in June. towards the latter part of the month that prices subsided somewhat, amid International maize prices remained generally stable in June, with the easing pressure to secure supplies and a lack of fresh interest. In the Americas, benchmark US maize (No.2, Yellow, f.o.b.) price averaging USD 158 per a sale to Iraq provided a further boost to long grain quotations in the United tonne, virtually unchanged from May and nearly 13 percent down from the States of America, which had already found support on continued concerns corresponding month in 2016. After increasing early in the month on concerns over flood losses and a good pace of exports.A n upbeat pace of sales also about hot conditions in key growing areas, following some delays in planting underpinned quotations in Argentina and Uruguay, while prices took a in April and May, prices declined in the second half of June on account of downturn in Brazil, amid limited buying interest and currency movements. International wheat prices Latest Price Percent Change USD per tonne (Jun-17) 1M 3M 1Y 250 US (Gulf), Wheat (US No. 2, Hard 226.25 13 14.1 14.3 230 Red Winter) 210 EU (France), Wheat (grade 1) 187.75 0.3 -1.4 2 Black Sea, Wheat (milling) 188.25 0.8 -2 0.5 190 Argentina, Wheat (Argentina, 190.50 1 -0.7 -9.3 170 Trigo Pan, Up River, f.o.b.) 150 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Source(s): International Grains Council International maize prices Latest Price Percent Change USD per tonne (Jun-17) 1M 3M 1Y 210 200 US (Gulf), Maize (US No. 2, 157.82 0.1 -0.6 -12.6 Black Sea, Maize (feed) 172.00 0.7 1 -16.5 190 180 Argentina, Maize (Argentina, Up 155.25 -3.8 -5 -21 River, f.o.b.) 170 Ukraine, Maize (oer, f.o.b.) 171.80 0.5 0.5 -16 160 150 140 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Source(s): USDA; International Grains Council; APK-Inform Agency International rice prices Latest Price Percent Change USD per tonne (Jun-17) 1M 3M 1Y 550 Thailand (Bangkok), Rice (Thai 469.20 9.2 22 3 500 100% B) 450 Viet Nam, Rice (25% broken) 378.40 14.1 13.6 12.2 400 India, Rice (25% broken) 375.00 4.2 9 3.9 350 US, Rice (US Long Grain 2.4%) 445.00 6.4 12.7 -0.7 300 250 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Source(s): Thai Rice Exporters Association; FAO rice price update For more information visit the FPMA website here 2 GIEWS FPMA Bulletin 10 July 2017 DOMESTIC PRICE WARNINGS Countries where prices of one or more basic food commodity are at abnormal high levels which could negatively impact access to food Bangladesh | Rice Growth Rate (%) Rice prices increased further to record highs Prices of coarse rice rose further to record highs in June reflecting dwindling market Same period to 06/17 availabilities, following flood-induced losses to the 2017 main boro crop, coupled average with reduced production and imports in 2016. In response to the high prices, the Government has recently purchased increased quantities of rice from neighbouring 3 months 7.5 -0.2 countries and also announced the reduction of the import duty on rice to 10 percent from the current 25 percent, while the Central Bank has removed the Letter of 12 months 4.0 -0.2 Credit margin on rice imports until 31 December 2017 (FPMA Food Policies). Compound growth rate in real terms. Refers to: Bangladesh, Dhaka, Wholesale, Rice (coarse- BR-8/ 11/ Guti/ Sharna) Burundi | Maize Growth Rate (%) Maize prices firm and at high levels in June Prices of maize remained firm in June, at about twice their year-earlier levels Same period to 06/17 despite the 2017B harvest. The high level of prices reflects an overall tight supply average situation due to a reduced 2017A harvest, gathered earlier in the year, and lower imports from neighbouring United Republic of Tanzania and Rwanda. A weak 3 months 0.4 -3.4 currency and low foreign currency reserves hampering trade, and fuel shortages leading to higher transport costs, exerted additional upward pressure on prices. 12 months 5.6 -0.3 By contrast, prices of staple beans declined in the past weeks with the ongoing Compound growth rate in real terms. harvest. Maize seeds and flour, cassava and flour, rice and beans were exempted Refers to: Burundi, Bujumbura, Wholesale, Maize from custom duties in mid-May. Ethiopia | Maize Growth Rate (%) Maize prices strengthened further in June Prices of maize continued to increase significantly in June and reached levels Same period to 06/17 well above those a year earlier. The sharp increase of the recent months reflects average seasonal trends compounded by concerns about the overall performance of the belg harvest, just started, due to early season dryness and Fall armyworm infestations 3 months 9.2 5.1 in southwestern areas, which affected yield potential. By contrast, prices of teff levelled off or declined in some markets in June, but they were still higher than in 12 months 3.4 -0.7 the same month last year. Prices of wheat, partly imported and mainly consumed Compound growth rate in real terms. in urban centres, slightly increased in June in the capital, Addis Ababa, but remained Refers to: Ethiopia, Jimma, Wholesale, Maize around their year-earlier levels reflecting adequate volumes of imports and a good 2016 output. Price warning level: High Moderate For more information visit the FPMA website here 10 July 2017 GIEWS FPMA Bulletin 3 DOMESTIC PRICE WARNINGS contd. Kenya | Maize Growth Rate (%) Prices of maize still high despite recent declines Prices of maize declined moderately in June from the previous month’s record highs Same period to 06/17 mainly as a result of imports from neighbouring Uganda and the United Republic of average Tanzania.