Global Cereal Prices Surge in May Amid Crop Concerns and Supply Chain Disruptions

International prices of all major cereals rose in May 2024. Wheat export prices saw significant increases due to concerns about unfavorable crop conditions in key producing countries, while maize export prices also climbed due to various factors. This information was reported by the Food and Agriculture Organization of the United Nations in its June 2024 Food Price Monitoring and Analysis (FPMA) Bulletin. Additionally, the FAO All Rice Price Index increased in May, driven by higher Indica rice quotations.

In many countries monitored by FAO, domestic staple food prices remained at high levels in April and May 2024, underpinned by adverse weather events, conflict-related disruptions to supply chains and macroeconomic difficulties contributing to high food distribution costs.

In India, the national average retail price of rice was almost unchanged month-on-month in May and above its year-earlier levels, as large ongoing government procurement purchases, needed for various welfare schemes, limited the decrease from the progressive arrival of the 2024 secondary crop in the market, the report said. The national average retail price of wheat grain was stable in May, as large government purchases offset the downward pressure from the 2024 harvest, which is officially estimated at a record level.

In China (mainland), the wholesale national average price of Indica and Japonica rice varieties remained stable in May and were close to their year-earlier levels, reflecting adequate market availabilities from the 2023 harvests and expectations of an above-average 2024 early double crop, to be harvested from June onwards. Wholesale wheat grain prices declined further in May and were below their levels from the previous year due to ample market availability from the 2023 harvests and favourable prospects for the 2024 harvest, which started in late May. 

Export prices of milling wheat from the Russian Federation continued to increase in May 2024 due to unfavourable crop conditions for the 2024 harvests but were still 11 percent lower year-on-year, supported by two consecutive years of strong harvests. In Ukraine, the export prices of milling wheat (offer, f.o.b.) increased for the second consecutive month in May as active demand was met with seasonally lower supply volumes. In Kazakhstan, the export price of milling wheat remained stable for a fifth consecutive month in May due to the positive crop forecast for 2024 and generally low trading activity in 2024.