International wheat prices weakened further over the past few weeks as large supplies from Argentina and Australia began to enter the market. By the fourth week in March, wheat prices from all major origins were substantially below their previous years values. The price of U.S. wheat No. 2 (HRW, fob) stood at US$141 per tonne, down US$4 per tonne from January and US$39 per tonne below the level in the same period last year. Similarly, prices for new crop Argentine Trigo Pan were quoted at around US$125 per tonne, down US$50 per tonne from March 1997. The Canadian and Australian wheat prices have also fallen substantially compared to the previous season, by about US$20 per tonne and US$30 per tonne, respectively. Also, on the Chicago futures market, the nearby wheat prices continued to remain under pressure, partly because of generally favorable crop prospects and partly as a result of the weakness in maize prices. However, the May and July wheat futures have remained stable in the past few weeks despite the seasonal uncertainties normally associated with the developments of new crops in the northern hemisphere during this period.
|(. . . . . . U.S.$/ton . . . . . .)|
|Rice white 3/||306||310||320|
|Rice, broken 4/||193||182||233|
SOURCE: FAO, see Appendix Table A.9
* Prices refer to the fourth 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.
Export prices for maize have also weakened somewhat over the past few weeks. By the fourth week of March, U.S. maize prices were quoted at around US$111 per tonne, lower than the January levels and some US$17 per tonne down from the corresponding period last year. This reflects favourable crop prospects, particularly in the United States. In addition, because of continuing exports from China and weaker import demand from several countries in Asia, associated with the financial crisis, maize prices have remained under downward pressure. These factors have resulted in the decline in prices in the nearby futures market while, as in the case for wheat, the changes in May and July futures have been less pronounced.
International prices for rice from most origins have strengthened during the first three months of 1998 as expectations for record import requirements during the year continue, and concerns about sufficient export availabilities began to surface. The FAO Export Price Index for Rice (1982-84=100) averaged 124 points in March, up from 123 points in February, but still remained below the level reached in March of last year. Should current concern that import demand could outstrip export supply in 1998 materialize, prices would come under upward pressure later in the year. Following the steep decline of Thai rice prices in the second half of 1997, partly due to the sharp devaluation of the baht in that period, prices recovered during the first three months of 1998.
The rise was supported by strong import demand and the recent relative strengthening of the Thai baht against the United States dollar. The price quotes for Thai 100B averaged US$308 per tonne during March, an increase of US$4 per tonne from the February average of US$304 per tonne. Prices of fully broken rice (Thai A1 Super), also rose by US$4 per tonne from their February average to US$194 per tonne in March. Prices of Vietnamese rice experienced a sharper boost than those for Thai rice as exporters tried to cover their large export commitments. In order to control the pace of rice exports, the Government has introduced a temporary freeze on new contract sales beyond May 1998. Export prices from Pakistan have also remained firm due to increased import demand. In the United States, however, the weakening of export prices for long grain rice continued due to lower import demand from the South and Central American countries which are traditionally the main customers of United States rice, as they are or will soon start harvesting their own crops.