In its latest bulletin released on March 13th, FAO’s Food Price Monitoring and Analysis (FPMA) team reveals a significant downturn in international grain prices throughout February 2024. The report indicates that wheat and maize prices saw notable decreases due to abundant supplies and fierce competition among exporters. International rice prices also followed suit, except for Indonesian purchases, as import demand remained subdued and new crop harvests commenced in exporting nations.
Despite this downturn trend in global markets, FAO monitors noted that domestic staple food prices remained high in numerous countries. Factors such as extreme weather events, conflicts, and weak national currencies were identified as underlying drivers of this continued price pressure. Of particular concern are the implications of shipping disruptions in critical maritime routes like the Panama Canal and the Red Sea. These disruptions could exacerbate inflationary pressures on domestic food markets by driving up food import costs in the short term.
MAIZE PRICES DIVE IN FEBRUARY
Among the major grains, maize prices experienced the most significant decline in February 2024. Brazil and Argentina witnessed drops of 13.8 percent and 8.7 percent, respectively, driven largely by expectations of bumper harvests. Similarly, Ukraine's maize prices eased by 4.9 percent, remaining below those of other competing origins. Reflecting the softer market sentiment, the benchmark United States maize price fell by 4.9 percent.
Furthermore, international wheat prices also saw a downturn, primarily influenced by a 6.7 percent decline in Russian quotations owing to ample 2023 harvests and significant carryover stocks. The competitive Russian values exerted downward pressure on prices of other exporters, leading to a 6.2 percent decrease in European Union prices. The benchmark USA wheat quotations also fell by 2.1 percent amidst favorable growing conditions.
The FAO All Rice Price Index averaged 140.5 points in February 2024, down 1.6 percent from January. Factors contributing to this decline included increased paddy imports in Vietnam and reduced demand in Thailand, further compounded by currency depreciation and efforts to attract fresh sales in Pakistan. However, US No. 2, 4% long-grain rice quotations bucked the trend, experiencing an increase due to heightened sales to Latin American buyers and reduced competition from South American exporters.
