THE GLOBAL WINDOW OF TURKISH FOOD AND AGRICULTURE The Global Window of Turkish Food and Agriculture Sector
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Cereal prices worldwide have been on a downward trend for some time. This is the result of the interaction of several factors on a global scale. Let’s take a closer look at the details…
While the prices of many global commodities such as cocoa, sugar and olive oil are rising, the prices of a few staples are falling. Cereal crops are one of them. There are many reasons for this. But the most important is the new harvest from Europe, the US and the Black Sea region.
“Aside from factors in the last few months, the main reasons for the fall in cereal prices over the past year are lower wheat and maize prices, wheat exports and oversupply from the Russian Federation, maize and wheat from Brazil, and exporter competition in maize markets,” Erin Collier, an economist for the UN Food and Agriculture Organisation (FAO), told FoodNavigator.
Such pricing decreases have been going on for a while…
Zanna Aleksahhina, Grain Analyst at market research firm Expana (formally Mintec), stated that the fall in grain prices is part of a larger trend. “While it is customary to see a seasonal decline in prices with the arrival of a new harvest and the start of a new marketing year, the ongoing decline is due to high global production and weak demand, especially from large buyers such as China,” said Zanna Aleksahhina.
Why are wheat prices falling?
Prices of many major grain crops, including wheat, are falling. “Due to the new harvests in Europe, the Black Sea region and the US, future wheat price forecasts continue to trend downwards,” Aleksahhina added.
The US Department of Agriculture’s (USDA) global wheat yield forecasts for July and August 2024/25, which are expected to reach 798.3 million tonnes, surprised many market analysts and further strengthened the downward trend in prices. Lack of demand from China also pushed prices down.
Which cereal crops are seeing price hikes?
After a slight decline in July, Indian rice prices generally followed an upward trend. “I would say that Indian rice prices have been rising for a while,” Aleksahhina said, adding that this is due to trade restrictions imposed by the Indian government in the form of bans and tariffs.
However, restrictions may be relaxed to avoid oversupply before the new crop arrives this October, according to market players. In addition to allowing white rice shipments with a fixed customs duty, the Indian government is considering replacing the 20 percent duty on parboiled rice exports with a fixed duty to avoid under-invoicing.
According to Aleksahhina, this could lower the price of Asian rice, which in turn could benefit the West African and Middle Eastern regions that depend on Indian rice…
