China News Service, July 19 Question:
International wheat prices have fallen, and
the world
food crisis has been lifted?
Xie Yiguan, a reporter from China-Singapore Finance and Economics
After the outbreak of the Russian-Ukrainian conflict, the price of international agricultural products has soared, and the price of wheat futures on the Chicago Mercantile Exchange once closed up nearly 13 US dollars / bushel.
"A shocking hunger crisis is spreading around the world," the World Food Programme said at the end of April.
However, since late May, futures prices such as wheat, which were once soaring, have continued to fall.
drop! drop! drop! Wheat and other food prices fall
On July 15, the price of wheat futures on the Chicago Mercantile Exchange fell by more than 3% during the session, hitting the lowest level before the outbreak of the Russian-Ukrainian conflict in February this year, and then the decline narrowed to 1.76%, at $7.81 per bushel, a far lower level. In the previous closing record of nearly 13 US dollars / bushel.
US wheat futures daily K chart.
A reporter from Zhongxin Finance and Economics found that since May 18, the price of wheat futures on the Chicago Mercantile Exchange has entered a "downward channel".
As of the close on July 15, the cumulative price drop has reached 39%.
In addition, the United Nations Food and Agriculture Organization recently released data showing that the FAO food price index fell slightly in June, the third consecutive monthly decline.
The FAO Cereal Price Index averaged 166.3 points in June, down 4.1 percent from the previous month.
Among them, international wheat prices fell 5.7%.
Not only the price of wheat fell, the data also showed that the price of international coarse grains fell by 4.1%, and the price of world corn fell by 3.5% month-on-month.
Why did international food prices fall?
In its report, the Food and Agriculture Organization of the United Nations attributed the decline in wheat prices in June to increased supplies from the new harvest in the northern hemisphere, improved crop conditions in some major producing countries such as Canada, and better production prospects in Russia; corn prices fell due to Argentina and Brazil. The supply of corn for the current season has increased, while the US corn planting situation has improved.
"The increase in wheat production in China and other countries has pushed the international wheat price to fall." Li Guoxiang, a researcher at the Institute of Rural Development of the Chinese Academy of Social Sciences, also told the reporter of Zhongxin Finance, "In addition, some time ago, the market may have some impact on the impact of the Russian-Ukrainian conflict on international wheat. Overvaluation, leading to 'inflated' wheat futures prices."
Data map: Wheat.
Photo by Zuo Yuyuan
"Meanwhile, Russian, Turkish, Ukrainian and United Nations negotiators have recently held talks on Ukrainian grain exports from ports, and an agreement may be reached, which is also a factor," Li Guoxiang added.
Regarding the recent decline in international wheat futures prices, according to foreign media reports, due to the substantial increase in the supply of grain exports from Crimea, grain is continuing to enter the world market in large quantities.
In recent days, Crimea's wheat exports far exceeded the level of previous years.
Another view is that the recent monetary tightening policies of many countries, especially the Fed rate hike, have a certain inhibitory effect on the rise in global commodity prices.
Li Guoxiang believes that "this impact may be there, but it is not the main reason for the decline in wheat prices."
Has the international food crisis
been lifted?
In Li Guoxiang's view, the decline in the prices of some international agricultural products such as wheat can only indicate that the food crisis has been temporarily eased, but it does not mean that the international food crisis has been lifted.
"Although the international grain price has dropped, the price level is still high." Li Guoxiang said.
This can also be seen from UN data: international wheat prices in June were still 48.5 percent higher than a year ago; international coarse grain prices were up 18.4 percent from a year earlier.
Li Guoxiang said, "For the Chinese people, the grain harvest is continuous and the price of flour is affordable; but for low-income and food-deficient countries, the situation will be more difficult."
A few days ago, the 2022 "State of World Food Security and Nutrition" jointly released by the United Nations Food and Agriculture Organization, the International Fund for Agricultural Development, the United Nations Children's Fund, the World Food Program and the World Health Organization pointed out that the number of people affected by hunger in the world in 2021 has reached 8.28 100 million, an increase of about 46 million compared with 2020, and a cumulative increase of 150 million since the outbreak of the new crown pneumonia.
The world is getting closer to the goal of ending all forms of hunger, food insecurity and malnutrition by 2030, the report said.
Image from The State of Food Security and Nutrition in the World 2022.
In addition, on the 15th, a joint statement by the heads of the Food and Agriculture Organization of the United Nations, the International Monetary Fund, the World Bank Group, the World Food Programme and the World Trade Organization on the global food security crisis mentioned that the new crown pneumonia epidemic, the disruption of international supply chains and the crisis in Ukraine Seriously disrupt the interconnected food, fuel and fertilizer markets.
In the short term, climate change is having a structural impact on agricultural productivity in many countries.
"Even if the conflict between Russia and Ukraine is over, the global food security situation is still not optimistic." Li Guoxiang said that on the one hand, extreme weather disasters occur frequently around the world, and on the other hand, the impact of the new crown pneumonia epidemic and superimposed economic factors will cause disturbance to food.
(Finish)