The latest Agricultural Market Information System (AMIS) Market Monitor for September sheds light on the intricate world of agricultural commodity markets. Key highlights include India’s export restrictions on rice, fluctuating wheat prices, and encouraging prospects for global soybean and maize production. However, rising prices of vital mineral fertilizers raise concerns about food security.

The September AMIS report highlights recent developments in agricultural commodity markets, which India’s export restrictions on rice and the ongoing war in Ukraine have dominated. While wheat prices continue to face downward pressure from abundant Black Sea exports prior to the termination of the agreement, the termination of the Black Sea Grain Initiative and Russian attacks on Ukrainian export facilities have increased market volatility, although prospects for global soybean and maize production this year are positive, with some stock rebuilding expected despite dry conditions in Argentina, parts of Europe, and North America. India announced bans on non-basmati white rice exports on July 20, 2023, and further restrictions on basmati rice exports on August 27, 2023, causing disruption and price spikes in rice markets.

The Market Monitor highlights recent surges in agricultural input prices, particularly those linked to fossil fuel-based energy sources such as mineral fertilizers, and related concerns about global food security. Mineral fertilizers are vital for maintaining agricultural crop yield and quality, because they provide essential nutrients such as nitrogen, phosphorus, and potassium, but their production relies heavily on raw materials and energy, and a few countries dominate the market, making it sensitive to global shocks. Rising energy and transport costs following the COVID-19 pandemic; the E.U./U.S. ban on Belarusian fertilizer exports; and the war in Ukraine, which led to sanctions on Russian fertilizer exports, led to sharply higher mineral fertilizer prices in 2021. A scenario analysis in the FAO Agricultural Outlook shows that high fertilizer costs lead to high food prices, with a hypothetical 1 percent increase in fertilizer prices resulting in a 0.2 percent increase in agricultural commodity prices. This affects crops that rely heavily on fertilizers and even those with lower fertilization needs because of substitution effects. 

Harvests of winter and spring wheat are nearing completion in the northern hemisphere, but conditions have varied, with exceptional conditions in Türkiye, and drought affecting several other regions. The situation for maize is also varied. In the southern hemisphere, Brazil is anticipating exceptional maize yields. Hot, dry weather has expanded in the southern and southwestern rice-growing regions of China. Kharif crops have rebounded from delayed rains in the eastern part of India. Southeast Asia, except Thailand (where wet-season yields are expected to decrease compared to last year due to ongoing drought and a high risk of damage from pests and disease), is experiencing generally favorable conditions for rice cultivation. In the northern hemisphere, soybean crops are developing with varying conditions, and there has been some improvement in the western hemisphere because of increased rainfall.