Economy

How Global Food Prices Fell First Time in 12 Months

Published

5 years ago

12/07/2021

By Adedapo Adesanya

Global food commodity prices fell in June for the first time in 12 months, according to a benchmark report released last week by the United Nations’ Food and Agriculture Organisation (FAO).

According to the Rome-based agency, the FAO Food Price Index averaged 124.6 points in June 2021, down 2.5 per cent from May. The decline in June marked the first drop in the index following 12 consecutive monthly increases.

However, this was still 33.9 per cent higher than its level in the same period last year.

The FAO Food Price Index tracks changes in the international prices of the most globally traded food commodities.

The drop in June reflected declines in the prices of vegetable oils, cereals and, though more moderately, dairy products, which more than offset generally higher meat and sugar quotations.

The FAO Vegetable Oil Price Index fell by 9.8 per cent in the month, marking a four-month low. The sizeable month-on-month drop mainly reflects lower international prices of palm, soy and sunflower oils.

The FAO Cereal Price Index fell by a more moderate 2.6 per cent from May but remained 33.8 per cent higher than its value in June 2020.

International maize prices dropped by 5.0 per cent, led by falling prices in Argentina due to increased supplies from recent harvests as a result of higher-than-earlier expected yields. International wheat prices declined slightly by 0.8 per cent in June, with a favourable global outlook supported by improved production prospects in many key producers outweighing most of the upward pressure from dry conditions affecting crops in North America.

The FAO Dairy Price Index fell by 1 per cent to 119.9 points in June. International quotations for all dairy products represented in the index fell, with butter registering the highest drop. This happened as a result of a fast decline in global import demand and a slight increase in inventories, especially in Europe.

The FAO Sugar Price Index moved against the overall food price trend, rising by 0.9 per cent month-on-month, marking the third consecutive monthly increase and reaching a new multi-year high. Uncertainties over the impact of unfavourable weather conditions on crop yields in Brazil, the world’s largest sugar exporter, exerted upward pressure on prices.

The FAO Meat Price Index also rose by 2.1 per cent over the month to June, continuing the increases for the ninth consecutive month and placing the index 15.6 per cent above its value in the corresponding month last year, but still 8.0 per cent below its peak reached in August 2014.

FAO’s forecast for global cereal production in 2021 has been lowered marginally to 2. 8 billion tonnes, according to the latest Cereal Supply and Demand Brief released today. However, the figure remains 1.7 per cent, or 47.8 million tonnes, higher than in 2020, which would mark a new record high.

Forecasts for world coarse grains production have been cut back to 1.5 billion tonnes, 3 million tonnes below last month’s expectation. A large cut to the Brazilian maize production forecast accounts for the bulk of the expected global decline, with prolonged periods of dry weather dragging down yield expectations.

World wheat output in 2021 has been lowered by 1 million tonnes to 784.7 million tonnes, still 1.2 per cent higher year-on-year, as the dry weather conditions in the Near East cut back yield prospects.

By contrast, the forecast of global rice production in 2021 has undergone a slight upward adjustment since June, with a record of 519.5 million tonnes of rice now expected to be harvested in 2021, up 1.0 per cent from 2020.

World cereal utilization in 2021/22 has been lowered by 15 million tonnes from the previous month to 2.8 billion tonnes, nevertheless still 1.5 per cent higher than in 2020/21. The downward revision comes largely from lower-than-earlier-anticipated utilization of maize in China for animal feed.

World cereal stocks by the close of seasons in 2021/22 are now forecast to rise above their opening levels for the first time since 2017/18, following a sharp upward revision to 836 million tonnes, up 2.4 per cent from last year’s relatively tight level. Higher maize stocks foreseen in China account for the bulk of this month’s upward revision to world cereal inventories.

FAO’s latest forecast for world trade in cereals in 2021/22 has been raised slightly since June and now stands at a record 472 million tonnes, driven primarily by likely large maize purchases from China taking global maize trade to record levels.

Economy

UAE to Leave OPEC May 1

Published

14 minutes ago

28/04/2026

Adedapo Adesanya

By Adedapo Adesanya

The United ‌Arab Emirates has announced its decision to quit the Organisation of the Petroleum Exporting Countries (OPEC) to focus on national interests.

This dealt ⁠a heavy ⁠blow to the oil-exporting group at a time when the US-Israel war on Iran had caused ⁠a historic energy shock and rattled the global economy.

The move, which will take effect on May 1, 2026, reflects “the UAE’s long-term strategic and economic vision and evolving energy profile”, a statement carried by state media said on Tuesday.

“During our time in the organisation, we made significant contributions and even greater sacrifices for the benefit of all,” it added. “However, the time has come to focus our efforts on what our national interest dictates.”

The loss of the UAE, a longstanding OPEC member, could create disarray and weaken the oil cartel, which has usually sought to show a united ⁠front despite internal disagreements over a range of issues from geopolitics to production quotas.

UAE Energy Minister Suhail Mohamed al-Mazrouei said the decision was taken after a careful look at the regional power’s energy strategies.

“This is a policy decision. It has been done after a careful look at current and future policies related to the level of production,” the minister said.

OPEC’s Gulf producers have already been struggling to ship exports through the Strait of Hormuz, a ‌narrow chokepoint between Iran and Oman through which a fifth of the world’s crude oil and liquefied natural gas supplies normally pass, because of threats and attacks against vessels during the war.

The UAE had been a member of OPEC first through its emirate of Abu Dhabi in 1967 and later when it became its own country in 1971.

The oil cartel, based in Vienna, has seen some of its market power wane as the US has increased its production of crude oil in recent years.

Additionally, the UAE and Saudi Arabia have increasingly competed over economic issues and regional politics, particularly in the Red Sea area.

The two countries had joined a coalition to fight against Yemen’s Iran-backed Houthis in 2015. However, that coalition broke down into recriminations in late December when Saudi Arabia bombed what it described as a weapons shipment bound for Yemeni separatists backed by the UAE.

Economy

NASD OTC Exchange Inches Up 0.03% as CSCS Outshines Four Price Decliners

Published

12 hours ago

28/04/2026

Adedapo Adesanya

By Adedapo Adesanya

Central Securities Clearing System (CSCS) Plc bested four price decliners on the NASD Over-the-Counter (OTC) Securities Exchange on Monday, April 27. The alternative stock market opened the week bullish during the session with a 0.03 per cent uptick.

According to data, the security depository company added N2.61 to its share price to close at N76.26 per unit compared with the preceding session’s N78.87 per unit.

As a result, the market capitalisation of the platform increased by N820 million to N2.425 trillion from N2.424 trillion, and the NASD Unlisted Security Index (NSI) gained 1.38 points to finish at 4,053.97 points compared with the 4,052.58 points it ended last Friday.

The four price losers were led by NASD Plc, which slumped by N3.80 to sell at N34.70 per share versus N38.50 per share. FrieslandCampina Wamco Nigeria Plc fell by N1.45 to N98.10 per unit from N99.55 per unit, Food Concepts Plc slid by 27 Kobo to N2.43 per share from N2.70 per share, and Geo-Fluids Plc dipped by 9 Kobo to N2.91 per unit from N3.00 per unit.

The value of securities transacted by market participants went down by 82.0 per cent to N7.4 million from N41.3 million units, the volume of securities declined by 28.5 per cent to 319,831 units from 447,403 units, and the number of deals dropped by 34.1 per cent to 29 deals from 44 deals.

Great Nigeria Insurance (GNI) Plc was the most active stock by value on a year-to-date basis with 3.4 billion units worth N8.4 billion, followed by CSCS Plc with 59.6 million units sold for N4.0 billion, and Okitipupa Plc with 27.8 million units exchanged for N1.9 billion.

Also, GNI Plc was the most traded stock by volume on a year-to-date basis with 3.4 billion units valued at N8.4 billion, followed by Resourcery Plc with 1.1 billion units traded for N415.7 million, and Infrastructure Guarantee Credit Plc with a turnover of 400 million units worth N1.2 billion.

Economy

Naira Opens Week Weaker at N1,364/$ at NAFEX After N5.80 Loss

Published

13 hours ago

28/04/2026

Adedapo Adesanya

By Adedapo Adesanya

The first trading day of the week in the currency market was bearish for the Naira in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Monday, April 27.

Yesterday, it lost N5.80 or 0.43 per cent against the United States Dollar to trade at N1,364.24/$1, in contrast to the N1,358.44/$1 it was traded last Friday.

In the same vein, the Nigerian currency depreciated against the Pound Sterling in the official market by N13.70 to close at N1,847.72/£1 versus the preceding session’s N1,834.02/£1, and slumped against the Euro by N11.56 to sell at N1,602.29/€1 versus N1,590.73/€1.

Also, the Nigerian Naira tumbled against the greenback during the trading day by N5 to quote at N1,385/$1 compared with the previous rate of N1,380/$1, and at the GTBank FX desk, it traded flat at N1,370/$1.

The poor performance of the domestic currency could be attributed to liquidity shortage at the official currency market on Monday, which came amid surging demand for international payments. At $76.50 million, interbank liquidity printed higher across 79 deals, up from the $43.572 million reported on Friday.

Nigeria’s gross external reserves declined to $48.45 billion amid a month-long decline in inflows, amid uncertainties in the global commodity market. The depletion of foreign reserves could be partly attributed to the Central Bank of Nigeria’s intervention in the FX market.

The market remains perturbed by persistent concerns over liquidity constraints, policy transparency, and weakening confidence in Nigeria’s FX market, while boosters, including oil prices, continue to look rocky due to stalled discussions and unclear ceasefire negotiations between the US and Iran.

A look at the cryptocurrency market, Bitcoin (BTC) has been rejected near $79,000 three times in eight sessions, leaving the level as the de facto ceiling of its current trading range even as major cryptocurrencies trade lower over the past day. It lost 0.9 per cent to sell at $77,003.61.

Analysts say that upcoming US Federal Reserve policy decisions and top tech firms’ earnings this week could provide the catalyst to push bitcoin decisively above $80,000.

The market also continued to weigh Iran’s interim deal proposal to reopen the Strait of Hormuz, which failed to advance over the weekend. The White House said US officials were discussing the latest Iranian proposal but maintained “red lines” on any deal to end the eight-week war.

Solana (SOL) dropped 1.8 per cent to $84.25, Ripple (XRP) went down by 1.6 per cent to $1.39, Ethereum (ETH) depreciated by 1.3 per cent to $2,290.00, Binance Coin (BNB) declined by 0.5 per cent to $625.18, and Cardano (ADA) fell by 0.2 per cent to $0.2480.

However, Dogecoin (DOGE) rose by 2.0 per cent to $0.1002, and TRON (TRX) appreciated by 0.2 per cent to $0.3242, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.