11 MAY 2011

European export wheat prices shot up +113.7% to USD 371/ton in one year to April according to the Food and Agriculture Organization (FAO) Global Information System data and even topped their April 2008 record of USD 359.19/ton.

Month-on-month in April, global wheat prices gained an extra +9% against the previous month according to the FAO's May Global Food Price Monitor report, but the organization notes that its Cereals Price Index climbed +5.5% on the same period and +71% in one year as « beneficial rains » in the last three weeks of the month pushed down prices in the USA and in Europe. However, the latest six weeks of dry weather over Europe and unusually hot temperatures in France, on average 25C, already triggered concerns over a new drought episode, possibly harsher than 1976 known as « the Big Heat » when temperatures averaged 30C for months.

In the Russian Federation, wheat prices remained firm, +18% in one year, but deflated compared with February thanks to the sale of grains from state intervention reserves.  Prices of potatoes, a basic staple in the region, soared +118% in one year due to low supply in the country and large commodity imports. The FAO's monthly report also notes that international prices of maize rose  in April, +11% in one month, but the meat price index stayed stable at 173 points, a record high since February however.

Global export prices of rice by contrast dipped -3% month-on-month as the benchmark Thai rice price averaged USD 507/ ton thanks to large export supplies after the good 2010 harvest  in the main rice exporters. In one year, rice prices grew +2% but fell -47% below peaks of 2008.

Key commodities price disparities and per region persisted equally to February and despite favorable currency exchange rates: white maize in South America soared +17% in Mexico in April, +15% in Nicaragua, +9% in Honduras, and +5% in El Salvador. In one year, white maize prices skyrocketed +31% in South Africa, but fell -29% in neighboring Zambia.