International Agricultural Commodity Prices

With the exception of rice, prices for grains and oilseeds on international markets are approaching the peak levels reached in 2008. It should be noted, however, that higher international commodity prices do not necessarily translate into higher consumer food prices in every country.

• World wheat prices have risen sharply over the last seven months. U.S. wheat export prices from the Gulf have almost doubled during this period. Global wheat production and quality have been plagued by adverse weather conditions in Russia, Europe, Canada, and Australia. Supplies have been further constrained by export restrictions in Russia and Ukraine.

• U.S. corn export prices have surged 70 percent since last June as strong domestic and foreign demand compete for tightening supplies in the United States, Argentina, and Brazil.

• In contrast, rice prices have only moved modestly over the last seven months. Thai export prices are actually three percent lower than a year ago and 40 percent lower than their 2008 peak. Global production is at record levels, and carry-in stocks are the highest in eight years.

• No major rice exporters have implemented new trade distorting policies, and no major importers have engaged in panic buying. Although purchases by countries such as Indonesia and Bangladesh have recently expanded, they have been more than offset by reductions in others, especially the Philippines.

• Soybean prices have surged nearly 50 percent since last June on strong foreign demand, especially from China. Unprecedented sales of new crop soybeans suggest a continuation of the strong foreign demand that has contributed to higher prices.

• USDA forecasts that food prices will continue to increase over the long-term, driven by rising demand from income growth in developing countries. This follows several decades of low commodity prices that discouraged investment and innovation in production technology.