World Farming Agriculture Commodity news - Weekly Updated - Exclusive and very popular -
Domestic food price inflation remains high. Inflation higher than 5% is experienced in 60% of low-income countries (no increase since the last update on March 18, 2024), 63.8% of lower-middle-income countries (no change), 39% of upper-middle-income countries (7.0 percentage points lower), and 27.3% of high-income countries (no change). In real terms, food price inflation exceeded overall inflation in 58.9% of 168 countries where data is available.
Compared to two weeks ago, the agricultural and export price indices closed 8% and 16% higher, respectively, while the cereal price index closed at the same level. Driven by supply disruptions in major producer countries, cocoa prices closed 31% higher than two weeks ago, driving the increase in the export price index. Weather conditions and disease outbreaks have decreased cocoa crop yields. Compared to two weeks ago, wheat prices closed 1% higher, and maize prices 1% lower, while rice prices closed at the same level as. On a year-on-year basis, maize prices are 31% lower and wheat prices 21% lower; rice prices are 27% higher. Maize prices are 13% higher, wheat prices 2% lower, and rice prices 50% higher than in January 2020. (See “pink sheet” data for agricultural commodity and food commodity prices indices, updated monthly.)
According to the Food and Agriculture Organization (FAO), there is a pressing need for external food assistance in 45 countries worldwide: 33 in Africa, nine in Asia, two in Latin America and the Caribbean, and one in Europe. The primary drivers of acute food insecurity in these regions are conflicts in Near East Asia and West and East Africa and widespread dry weather conditions in southern Africa. The list of countries requiring external assistance can be categorized into three broad, non-mutually exclusive groups: those with exceptional shortfalls in food production and supplies due to factors such as natural disasters, conflict, and supply chain problems; those with widespread lack of access to food due to conflict and economic factors such as low incomes and high food prices; and those with severe food insecurity in some areas due to factors such as refugee influx and crop failures combined with extreme poverty.
The latest FAO monthly report on food price trends reveals a global downturn in the prices of major cereals during February 2024, primarily due to abundant supplies and fierce competition among exporters resulting in decreases in international wheat, maize, and rice prices. Despite these international declines, domestic staple food prices remained high in many countries, primarily because of factors such as extreme weather events, conflict, insecurity, and currency depreciation. Disruptions in shipping routes, such as in the Panama Canal and the Red Sea, pose further challenges by increasing food import costs.
The FAO stressed the urgent need for transformative measures in agrifood systems to combat the escalating impact of the climate crisis on food security and agriculture. This call to action comes in response to the alarming findings of the latest UN State of the Global Climate Report, led by the World Meteorological Organization, which highlights the continuous breaking of climate change indicator records, such as surface temperatures and greenhouse gas levels, in 2023. The UN report underscores the vulnerability of the agricultural sector to climate-related risks, with drought posing a significant threat and causing a substantial portion of global damage and loss. These findings underscore the urgent need for comprehensive, coordinated efforts to address climate change impacts, mitigate risks, and build resilience within vulnerable communities worldwide.
Following Russia’s invasion of Ukraine, trade-related policies imposed by countries have surged. The global food crisis has been partially made worse by the growing number of food and fertilizer trade restrictions put in place by countries with a goal of increasing domestic supply and reducing prices. As of March 25, 2024, 16 countries have implemented 23 food export bans, and 8 have implemented 15 export-limiting measures.
World Bank Action
In May 2022, the World Bank made a commitment of making available $30 billion over a period of 15 months to tackle the crisis. We have surpassed that goal. The World Bank has scaled up its food and nutrition security response, to now making $45 billion available through a combination of $22 billion in new lending and $23 billion from existing portfolio.
Our food and nutrition security portfolio now spans across 90 countries. It includes both short term interventions such as expanding social protection, also longer-term resilience such as boosting productivity and climate-smart agriculture.
The Bank's intervention is expected to benefit 335 million people, equivalent to 44% of the number of undernourished people. Around 53% of the beneficiaries are women – they are disproportionately more affected by the crisis. Some examples include:
In Honduras, the Rural Competitiveness Project series (COMRURAL II and III) aims to generate entrepreneurship and employment opportunities while promoting a climate-conscious, nutrition-smart strategy in agri-food value chains. To date, the program is benefiting around 6,287 rural small-scale producers (of which 33% are women, 15% youth, and 11% indigenous) of coffee, vegetables, dairy, honey, and other commodities through enhanced market connections and adoption of improved agricultural technologies and has created 6,678 new jobs.
In Honduras, the Corredor Seco Food Security Project (PROSASUR) strives to enhance food security for impoverished and vulnerable rural households in the country’s Dry Corridor. This project has supported 12,202 extremely vulnerable families through nutrition-smart agricultural subprojects, food security plans, community nutrition plans, and nutrition and hygiene education. Within the beneficiary population, 70% of children under the age of five and their mothers now have a dietary diversity score of at least 4 (i.e., consume at least four food groups).
The $2.75 billion Food Systems Resilience Program for Eastern and Southern Africa, helps countries in Eastern and Southern Africa increase the resilience of the region’s food systems and ability to tackle growing food insecurity. Now in phase three, the program will enhance inter-agency food crisis response also boost medium- and long-term efforts for resilient agricultural production, sustainable development of natural resources, expanded market access, and a greater focus on food systems resilience in policymaking.
A $95 million credit from IDA for the Malawi Agriculture Commercialization Project (AGCOM) to increase commercialization of select agriculture value chain products and to provide immediate and effective response to an eligible crisis or emergency.
The $200 million IDA grant for Madagascar to strengthen decentralized service delivery, upgrade water supply, restore and protect landscapes, and strengthen the resilience of food and livelihood systems in the drought-prone ‘Grand Sud’.
A $60 million credit for the Integrated Community Development Project that works with refugees and host communities in four northern provinces of Burundi to improve food and nutrition security, build socio-economic infrastructure, and support micro-enterprise development through a participatory approach.
The $175 million Sahel Irrigation Initiative Regional Support Project is helping build resilience and boost productivity of agricultural and pastoral activities in Burkina Faso, Chad, Mali, Mauritania, Niger, and Senegal. More than 130,000 farmers and members of pastoral communities are benefiting from small and medium-sized irrigation initiatives. The project is building a portfolio of bankable irrigation investment projects of around 68,000 ha, particularly in medium and large-scale irrigation in the Sahel region.
Through the $50 million Emergency Food Security Response project, 329,000 smallholder farmers in Central Africa Republic have received seeds, farming tools and training in agricultural and post-harvest techniques to boost crop production and become more resilient to climate and conflict risks.
The $15 million Guinea Bissau Emergency Food Security Project is helping increase agriculture production and access to food to vulnerable families. Over 72,000 farmers have received drought-resistant and high-yielding seeds, fertilizers, agricultural equipment; and livestock vaccines for the country-wide vaccination program. In addition, 8,000 vulnerable households have received cash transfer to purchase food and tackle food insecurity.
The $60 million Accelerating the Impact of CGIAR Research for Africa (AICCRA) project has reached nearly 3 million African farmers (39% women) with critical climate smart agriculture tools and information services in partnership with the Consortium of International Agricultural Research Centers (CGIAR). These tools and services are helping farmers to increase production and build resilience in the face of climate crisis. In Mali, studies showed that farmers using recommendations from the AICCRA-supported RiceAdvice had on average 0.9 ton per hectare higher yield and US$320 per hectare higher income.
The $766 million West Africa Food Systems Resilience Program is working to increase preparedness against food insecurity and improve the resilience of food systems in West Africa. The program is increasing digital advisory services for agriculture and food crisis prevention and management, boosting adaption capacity of agriculture system actors, and investing in regional food market integration and trade to increase food security. An additional $345 million is currently under preparation for Senegal, Sierra Leone and Togo.
A $150 million grant for the second phase of the Yemen Food Security Response and Resilience Project, which will help address food insecurity, strengthen resilience and protect livelihoods.
$50 million grant of additional financing for Tajikistan to mitigate food and nutrition insecurity impacts on households and enhance the overall resilience of the agriculture sector.
A $125 million project in Jordan aims to strengthen the development the agriculture sector by enhancing its climate resilience, increasing competitiveness and inclusion, and ensuring medium- to long-term food security.
A $300 million project in Bolivia that will contribute to increasing food security, market access and the adoption of climate-smart agricultural practices.
A $315 million loan to support Chad, Ghana and Sierra Leone to increase their preparedness against food insecurity and to improve the resilience of their food systems.
A $500 million Emergency Food Security and Resilience Support Project to bolster Egypt's efforts to ensure that poor and vulnerable households have uninterrupted access to bread, help strengthen the country's resilience to food crises, and support to reforms that will help improve nutritional outcomes.
A $130 million loan for Tunisia, seeking to lessen the impact of the Ukraine war by financing vital soft wheat imports and providing emergency support to cover barley imports for dairy production and seeds for smallholder farmers for the upcoming planting season.
In May 2022, the World Bank Group and the G7 Presidency co-convened the Global Alliance for Food Security, which aims to catalyze an immediate and concerted response to the unfolding global hunger crisis. The Alliance has developed the publicly accessible Global Food and Nutrition Security Dashboard, which provides timely information for global and local decision-makers to help improve coordination of the policy and financial response to the food crisis.
The heads of the FAO, IMF, World Bank Group, WFP, and WTO released a Third Joint Statement on February 8, 2023. The statement calls to prevent a worsening of the food and nutrition security crisis, further urgent actions are required to (i) rescue hunger hotspots, (ii) facilitate trade, improve the functioning of markets, and enhance the role of the private sector, and (iii) reform and repurpose harmful subsidies with careful targeting and efficiency. Countries should balance short-term urgent interventions with longer-term resilience efforts as they respond to the crisis.
The S&P GSCI Agriculture Index decreased 1.1% WOW The US dollar rally (DXY +0.5% WOW), concerns regarding Chinese corn demand, good early US winter wheat ratings, and soy harvest pressure weighed on G&O markets. In contrast, softs found support week-on-week, with coffee futures recording the largest gains amid tight stocks.
CBOT Wheat declined 2% WOW to finish at USc 544/bu. Meanwhile, Matif dropped 1.3% WOW to finish around EUR 202/mt. CBOT Wheat futures initially popped 3.8% following the USDA’s cut to soft red winter acres on Thursday; however, prices have retracted since, with the focus shifting to US crop conditions.
ICE 11 Sugar is up 2.5% WOW, with the Brazilian real marginally down (-1.6%) and Brent higher (+3.7%). Last week saw some rainfall over Brazil’s Center-South, but not enough to disrupt the early harvest in any meaningful way. The two-week forecast also sees some rainfall but at normal levels for this time of the year. The start of Brazil’s Center-South harvest is likely to be strong but not as strong as it could have been.
ICE Arabica futures increased a noteworthy 6.4% WOW, as the Brazilian real continues to weaken (-1.6% WOW) amid an expanding certified stock level. While this increase in arabica inventories was anticipated (as discussed in our Q1 Coffee Outlook: Dearth of stocks), the European coffee federation’s statement that stocks are still decreasing (6.7m bags as of late February) surprised the market and provided price support.
Avian influenza has infected a dairy herd in Ohio for the first time and was detected in additional herds in Kansas and New Mexico, according to the US government, expanding an outbreak in cows that has raised concerns about possible risks to humans, reported Reuters.
The US Department of Agriculture (USDA) has confirmed infections in herds across six states since it first reported cases in Texas and Kansas on March 25.
The infected dairy in Ohio received cows on March 8 from a Texas dairy, which later confirmed a detection of bird flu, the Ohio Department of Agriculture said.
The USDA has said transmission of the disease between cows cannot be ruled out.
The initial cases in Texas and Kansas appear to have been introduced by wild birds, and the strain of the virus in subsequent cases in New Mexico, Michigan and Idaho was very similar, according to USDA.
Migratory birds have spread avian flu around the globe since 2022, infecting poultry and other species.
"In the state of Kansas, all the genetic sequencing data that we can come up with is still indicating it is a spillover event from a wild bird exposure," Kansas Animal Health Commissioner Justin Smith said in an interview on Thursday.
Avian influenza has been found in three dairy herds in Kansas, two in New Mexico, seven in Texas and one each in Ohio, Idaho and Michigan, according to USDA.
The spread to an increasing number of species and its widening geographic reach have raised the risks of humans being infected, the head of the World Organization for Animal Health said on Thursday.
Texas officials reported on Monday that a farm worker tested positive, and the only symptom was eye inflammation. The US Centers for Disease Control and Prevention considers the risk of avian influenza for humans to be low.
World Farming Agriculture Commodity news - Short update - 1st Week March 2024
The United Nations food agency's world price index rebounded in March from a three-year low, boosted by increases for vegetable oils, meat and dairy products, reported Reuters.
The Food and Agriculture Organization's (FAO) price index, which tracks the most globally traded food commodities, averaged 118.3 points in March, up from a revised 117.0 points the previous month, the agency said on Friday.
The February reading was the lowest for the index since February 2021 and marked a seventh consecutive monthly decline.
International food prices have fallen sharply from a record peak in March 2022 at the start of Russia's full-scale invasion of fellow crop exporter Ukraine.
The FAO's latest monthly reading was 7.7% below the year-earlier level, it said.
In March, agency's vegetable oil price index jumped 8% month on month, the dairy index gained nearly 2.9% for a sixth straight monthly rise, while its meat index added 1.7%.
The dairy index gained 2.9% for a sixth straight monthly rise, driven by cheese and butter prices, while the FAO's meat index added 1.7%, reflecting higher poultry, pig and beef prices.
Those gains outweighed declines for cereals, which shed 2.6% from February, and for sugar, which fell 5.4%.
Wheat led the decline in cereals amid strong export competition and cancelled purchases by China, offsetting a slight rise for maize (corn) prices partly due to logistical difficulties in Ukraine, the FAO said. GRA/
Weaker sugar prices mainly reflected an upward revision to expected production in India and an improved harvest pace in Thailand, it said.
In separate cereal supply and demand data, the FAO nudged up its forecast for world cereal production in 2023/24 to 2.841 billion metric tons from 2.840 million projected last month, up 1.1% from the previous season.
For upcoming crops, the agency trimmed its forecast for 2024 global wheat output to 796 million tons, from 797 million last month, due to reduced expectations for European Union and UK crops following rain-hit sowing and dry conditions in some areas.
For maize, a fall in world production was anticipated but the volume would remain above the average of the past five years, the FAO said, without giving a precise forecast.
Commodities April 07
