FEWS NET September 2018 Price Watch PRICE WATCH with ANNEX... • Staple commodity prices were...

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Transcript of FEWS NET September 2018 Price Watch PRICE WATCH with ANNEX... • Staple commodity prices were...

  • FEWS NET [email protected] www.fews.net

    FEWS NET is a USAID-funded activity. The content of this report does not necessarily reflect the view of the United States Agency for International Development or the United States Government.

    PRICE WATCH September 2018 Prices October 31, 2018

    KEY MESSAGES

    • In West Africa, the 2017/18 marketing season is ending with favorable harvest prospects for 2018/19, as the rainy season concluded in most countries. Early harvests along with release of carryover stocks from the previous year are progressively revitalizing market supplies across the region. Month-to-month price variation is stable or declining at below last year’s levels. Prices remain above average. Insecurity-related market disruptions persist in the Greater Lake Chad basin, northern and central Mali, and the Liptako-Gourma (Page 3).

    • In East Africa, markets remain severely affected by insecurity and significant macro-economic challenges in Yemen, South Sudan, and Sudan disrupting market supplies. Deteriorating economic conditions in Ethiopia kept prices elevated. Maize and sorghum prices were stable or declined because of the impending October-to-January harvest in Ethiopia, Kenya, South Sudan, and Sudan, and ample supplies in Tanzania, Uganda, and Somalia (Page 4).

    • In Southern Africa, domestic maize supplies were at normal levels in September. Maize grain prices exhibited mixed trends, which is typical in September as the lean season begins to approach. Maize grain was generally able to circulate between surplus and deficit areas, except for Zambia where restrictions on export permits resulted in negligible formal maize grain exports compared to average levels. Export parity prices remain competitive in South Africa, encouraging exports to international markets (Page 5).

    • In Central America, maize and bean market supplies are near average and supported by the current Primera harvest, carryover stocks, and imports. Maize prices remained above average but seasonally decreased in September in all countries except Nicaragua where market disruptions from the ongoing political crisis continued to cause price increases. Bean prices were stable or decreasing and below average across the region. In Haiti, local maize grain and local black bean prices were mixed across key reference markets while imported rice and maize meal prices increased. The Haitian gourde depreciated further against the USD (Page 6).

    • Central Asia sustained adequate supplies and intraregional trade continues to fill local wheat deficits within the region. Kazakhstan and Pakistan are expected to have above-average upcoming wheat harvests while Afghanistan is expected to have below-average wheat production. Wheat prices remained stable and below-average in Kazakhstan, the region’s largest exporter (Page 7).

    • International staple food markets remain well supplied. Rice, wheat and soybean prices decreased while maize prices were mixed (Figure 2). Crude oil and global fertilizer prices strengthened further in September and remained above 2017 levels (Page 2).

    Figure 1. FEWS NET Country Coverage

    Source: FEWS NET

    Note: Market Watch countries are surplus-producing countries whose impact on global, regional, national, and/or local markets is included in FEWS NET

    analysis.

    FEWS NET monitors trends in staple food prices in countries at risk of food insecurity. The Price Watch provides an update on market and price trends in selected reference markets. Specific trends for key reference markets and commodities are available in the Price Watch Annexes 1 and 2. FEWS NET gratefully acknowledges partner organizations, ministries of agriculture, national market information systems, the Regional Agricultural Intelligence Network, the Food and Agriculture Organization of the United Nations (FAO), the World Food Programme (WFP), and others for their assistance in providing price data.

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  • PRICE WATCH October 2018

    Famine Early Warning Systems Network 2

    INTERNATIONAL MARKETS

    Current situation • International rice prices fell in September as prospects

    remain positive for the main Asian crop, which is expected by the end of the year (InterRice). Rice prices dropped closer to their five-year average levels (Figure 2). Global rice supplies are close to average (Figure 3).

    • Global maize prices eased across key reference markets in September but tightened in South Africa. U.S. and Chinese harvest progressed under favorable conditions, while concerns remained over dry conditions in Brazil, the Russian Federation, and parts of the E.U. (AMIS). Maize prices were above 2017 levels but remain below their five-year average levels (FAO and USDA).

    • International wheat prices were stable or falling due to stronger export competition, particularly from the Russian Federation (FAO and IGC). Wheat prices were above-average levels as market availability remains adequate, despite tightening supplies (Figure 3).

    • Global soybean prices eased marginally in September but remained above average amid expectations for record U.S. yields and bumper Brazilian crops (AMIS and IGC).

    • International crude oil prices increased in September as market uncertainties persist despite increased OPEC crude oil production to offset decline in Venezuela and Iran (U.S. Energy Information Administration). Crude oil prices remain above 2017 and average levels. Global fertilizer prices increased further in September and remained above 2017 levels as supply levels were unable to support a steady rise in demand (AMIS).

    Outlook • Strong carryover stocks and improved production will support satisfactory global rice supply, while trade is expected to

    remain close to record levels observed in 2017 owing to firm demand from Asia and Africa (InterRice and AMIS).

    • Global maize stocks are expected to tighten and could potentially push stock-to-use ratio to their lowest in five years. Trade is expected to remain firm as export demand stays strong (IGC and USDA).

    • Global wheat production is expected to remain below previous year levels driven by weaker production in Eastern Europe and Central Asia. Global wheat stocks are projected to fall for the first time since 2012 (World Bank and AMIS).

    • Global soybean utilization is revised downward on subdued demand from China while stocks are revised sharply upwards on higher forecasts for Argentina and the U.S. (IGC and AMIS).

    • International crude oil supply disruption risks remain high and could lead to greater price volatility over the coming months (U.S. Energy Information Administration). Global fertilizer prices are expected to continue strengthening from firm demand and higher energy costs (World Bank).

    Figure 2. Food commodity prices in selected international markets, January 2012 – September 2018

    Source: Food and Agriculture Organization of the United Nations (FAO), World Bank

    Figure 3. Global Market Indicators, 2018/19 compared to 2013- 2017 average

    Source: FEWS NET calculations based on USDA 2018

    Staple food price trends across the countries monitored by FEWS NET will vary considerably in the coming months in response to local and regional market conditions; international market trends will play a more limited role in most countries (Figure 2). Fuel price trends in FEWS NET countries will depend on both international market conditions, the evolution of local exchange rates in relation to the U.S. Dollar, and the design and implementation of local fuel import and price policies.

    http://www.infoarroz.org/portal/en/content.php?section=15 http://www.amis-outlook.org/amis-monitoring http://www.fao.org/giews/reports/fpma-bulletin/en/ https://apps.fas.usda.gov/psdonline/circulars/grain.pdf http://www.fao.org/giews/reports/fpma-bulletin/en/ http://www.igc.int/downloads/gmrsummary/gmrsumme.pdf http://www.amis-outlook.org/amis-monitoring http://www.igc.int/downloads/gmrsummary/gmrsumme.pdf https://www.eia.gov/outlooks/steo/ http://www.amis-outlook.org/amis-monitoring http://www.infoarroz.org/portal/en/content.php?section=15 http://www.amis-outlook.org/amis-monitoring http://www.igc.int/downloads/gmrsummary/gmrsumme.pdf https://apps.fas.usda.gov/psdonline/circulars/grain.pdf http://www.worldbank.org/en/research/commodity-markets http://www.amis-outlook.org/amis-monitoring http://www.igc.int/downloads/gmrsummary/gmrsumme.pdf http://www.amis-outlook.org/amis-monitoring https://www.eia.gov/outlooks/steo/ http://www.worldbank.org/en/research/commodity-markets

  • PRICE WATCH October 2018

    Famine Early Warning Systems Network 3

    WEST AFRICA

    Current situation • As the 2017/18 marketing season concludes in West Africa,

    supplies of staple foods remain stable or slightly below average in the Sahel. Early green harvests, recent humanitarian interventions, and release of carryover stocks by traders, as encouraged by good harvest prospects, are gradually reinforcing market supplies.

    • Household demand is decreasing, with the new harvest, at a normal seasonal level, except in Senegal where demand for legumes has increased due to a sustained demand and low stocks. Current demand is dominated by urban consumption and exports. Market activities and trade flows remained disrupted in the Greater Lake Chad basin, northern and central Mali, and the Liptako-Gourma area.

    • In Nigeria, as the main harvest begins, supplies are increasing across surplus and deficit markets. Thus, with most households consuming own production, c