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 International wheat
prices have been falling sharply in recent weeks with seasonal harvest
pressure from bumper crops being gathered in major producing regions in
the northern hemisphere starting to influence markets. In July, the
first month of the 2008/09 marketing season, US wheat (No.2 Hard Red
Winter, f.o.b. Gulf) averaged USD 343 per tonne, down USD 15 per tonne
from the June average. At this level, wheat prices are some 37 percent
higher than in July 2007 but taking into account the slide in the value
of US dollar against nearly all other major currencies, the increase in
prices since last year has been lower, at around 27 percent . In the
futures markets, wheat prices have remained under persistent downward
pressure in recent weeks. In addition to the favourable supply
prospects, recent declines in maize and crude oil prices have also
weighed down on wheat prices. By the fourth week in July, the Chicago
Board of Trade (CBOT) September wheat futures dropped to about USD 288
per tonne, down 32 percent, or USD 133 per tonne, from their peak in
mid-March but still 26 percent above the corresponding period last year.
After peaking to record levels in June, international maize
prices fell sharply in July, mostly in response to improved production
prospects and, more recently, to a significant slide in crude oil
prices. During the first four weeks of July, US maize (No. 2 Yellow,
Gulf) averaged USD 272 per tonne, USD 9 per tonne down from the June
average but some 80 percent above the average in July 2007. In real
terms and after correcting for the decline in value of US Dollar
against the major currencies, the increase in maize prices from the
corresponding period last year stands at 68 percent. Maize prices on
the futures market have also fallen in July from their highs in June,
in part influenced by the decline in crude oil and soybean prices,
while prospects for larger crop in South Africa and improved crop
conditions in the United States also weighed on maize prices. By the
fourth week in July, the CBOT September maize futures were quoted at
around USD 225 per tonne, some USD 63 per tonne lower than at the start
of the month but still USD 97 per tonne, or 75 percent , more than a
year ago.
After reaching a peak in May, rice prices
fell in June and continued to fall in early July, reflecting greater
export availabilities in countries such as Thailand and Viet Nam and a
relatively weak import demand. The Thai white rice 100% B quotation,
the world’s benchmark grade for rice, averaged USD 837 per tonne in the
first two weeks of July, USD 126 per tonne down from the May average,
but still 150 percent higher than their corresponding week in 2007.
However, the downward price slide slowed substantially by mid-July,
reflecting the impact of policy measures to support prices in some
major producing countries. Thailand’s official rice intervention
programme has gained momentum since its launching on 15 June,
especially as procurement prices were reported to outstrip the
prevailing market rates by 30 percent. World prices were also lifted by
Viet Nam’s decision to raise the minimum export prices (5 percent
broken) to USD 750 per tonne, up from USD 720 in the previous week.
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