The Market Monitor - Trends of staple food prices in vulnerable countries, Issue 17 - October 2012
This bulletin examines trends in staple food and fuel prices, the cost of the basic food basket, terms of trade and consumer price indices for 70 countries in the third quarter of 2012 (July to September, Q3-2012). The issue contains also a special focus on countries most vulnerable to the tightening of the global grain markets.
Following two successive quarters of decline, the global cereal price index increased by 5.2 percent in Q3-2012 (July-September quarter). This upward trend is driven by global wheat and maize prices which increased by 11 and 9 percent respectively during Q3-2012 compared to the same quarter of last year.
Droughts and extreme summer heat in the United States and the Black Sea region have resulted in reduced global grain production and exports. Their impact is not yet widespread across vulnerable countries. However, seasonally adjusted prices of cereals (maize and wheat) increased significantly in July-September compared to April-June 2012 in several cereal import dependent countries (e.g. Armenia, Colombia, Guinea Bissau, Kyrgyzstan, Malawi, Peru, Senegal, Sri Lanka and Syria).
The impact of staple commodity price changes on the cost of the basic food basket (Figure 1) is severe (above 10%) in only 3 out of 70 countries (Ghana, Guinea Bissau and Malawi), and high (between 5 and 10%) in 5 countries (Armenia, Kyrgyzstan, Niger, Syria and Tanzania). The most severe effects are driven by maize prices in Malawi, wheat prices in Kyrgyzstan and Armenia, and imported rice in Guinea Bissau (Figure 2).