Following a sharp drop in July and August, international wheat prices
stabilized at around U.S. $ 180 per ton in September and early October (Table
A. 9). By October 10, U.S. wheat No. 2 was traded at U.S. $ 182 per ton (fob).
This was down U.S. $ 115 per ton, or almost 40 percent, from the peak of
U.S. $ 279 per ton reached in April and U.S. $ 19 per ton lower than the
corresponding period last year. The decline in wheat prices has slowed down
considerably in recent weeks due to large export sales from the United States
and the EC and to concerns over the low level of wheat stocks in the United
States. Looking further ahead, nearby December wheat futures at the Chicago
Board of Trade (CBOT) have been traded some U.S. $ 20 per ton lower than
during the same period last year and current indications for March contracts
point to an even larger difference, of about U.S. $ 30 per ton (Table A.11).
Assuming a normal development of winter wheat plantings in the northern
hemisphere, spot wheat prices are likely to weaken further in the coming
months, especially after November, when the anticipated bumper crop in Argentina
could put more pressure on prices. Sales from the EC have already started
to be made with export subsidies and this, combined with larger exports from
Canada and Australia, may result in keener competition among the major exporting
countries this season.
Maize prices fell further since the beginning of September
and by 10 October, the price of U.S. No.2 maize (delivered Gulf ports) reached
U.S. $ 131 per ton, about U.S. $ 15 per ton below last year, and U.S. $ 90,
or 60 percent, below the peak of U.S. $ 221 per ton reached in July. The decline
in prices of maize started later than that for wheat, mainly because the maize
crop development in the United States, by far the largest coarse grain exporter,
remained uncertain for longer. However, a slow-down of demand as the harvest
approaches and prospects for a significant increase in production has started
to put additional pressure on maize prices. In the futures market, maize prices
also retreated further in recent weeks, and by October 10, maize prices for
nearby delivery in December was quoted at U.S. $ 114 per ton, almost U.S. $
10 per ton less than during the same period last year and the lowest level since
February 1995. The downward trend, as reflected by the continuing drift of maize
prices on futures markets, results from the market's perception of smaller import
demand in prospect, and thus, of more competition among the exporters. Moreover,
this year's likely increase in supplies of feed-quality wheat, especially in
Canada and the EC, along with ample supplies of barley and sorghum could add
further pressure on maize prices in the coming months.
International rice prices remained depressed through most of September
and October. By mid October, the FAO Export Price Index (1982-84=100) averaged
129 points, 5 points down from September and about 13 points below its January
level. The prices of both high and low quality rice from almost all origins
declined under the pressure of a large harvest coming into the market and
limited new demand for rice. Thai 100 B was quoted at U.S.$ 310 per ton,
down U.S.$ 30 from the previous month and some U.S.$ 100 less than at the
same time last year. In the United States, the comparable grade, US No. 2,
4 percent brokens, was quoted at U.S.$ 429 per ton, down U.S.$ 27 from last
LATEST CEREAL EXPORT PRICES *
||(. . . . . . U.S.$/ton . . . . . .)|
|Rice, white 3/||310||348||410|
|Rice, broken 4/||207||223||301|
SOURCE: FAO, see Appendix Table A.9
* Prices relate to the second week of the month.
1/ No. 2 Hard Winter (Ordinary Protein).
2/ Indicative traded prices.
3/ 100% second grade, f.o.b. Bangkok.
4/ A1 super, f.o.b. Bangkok.
Lower quality rice prices, which had taken the brunt of the year's price
decline, also fell further. The price for Thai A 1 Super, which had rebounded
slightly in early September fell during the remainder of the month. At U.S.$
210 per ton, it is now some U.S.$ 88 lower than during the same period last
year. In Viet Nam, the export price for 35 percent broken rice, which had
declined steadily since the start of the year, fell further to about U.S.$
203 per ton. India reduced its export price for the second successive
month. Indian 25 percent broken rice is now quoted at around U.S.$ 240 per
ton, U.S.$ 5 less than their September level. In Pakistan, prices took a
steep fall with IRRI 15-20 percent broken rice now quoted at U.S.$ 230 per
ton, sharply down from the previous month.