Price relief in May for wheat, oils

May saw significant declines in international prices for wheat, maize, vegetable oils and cheese, while rice, sugar and meat prices increased.This is good news for Namibia, which is a net importer of food and is heavily dependent on foreign markets for the import of, among other things, maize and wheat.The cereal price index fell by 4.8% compared to the previous month, according to the UN Food and Agriculture Organisation (FAO) food price index released last week, led by a 9.8% drop in world prices for maize.This is believed to be due to favourable prospects in the production of maize as well as sluggish demand for imports.The FAO monitors international price changes for the most commonly traded food commodities using the index.WheatWorld prices for wheat also fell by around 3.5% thanks to sufficient supplies and the extension of the Black Sea Grain Initiative.In contrast, the international price for rice has tightened due to a reduced supply by exporting countries, while Asian countries continue to buy it.The FAO index for oils fell by 8.7% in May, which means oils are currently up to 48.2% cheaper than earlier in 2023. The price of sunflower oil has fallen while there are currently sufficient supplies of it worldwide, while the price of palm oil has started to fall significantly since April. The price for soybean oil also fell for the sixth consecutive month after a record harvest of soybeans in Brazil and record stocks in America.The index for dairy has also fallen by 3.2% since April after the international price of cheese trended strongly downward. This is attributed to sufficient supplies being available thanks to the seasonal availability of milk in the northern hemisphere.International prices for sugar unfortunately saw a third increase in four consecutive months, while the FAO index for meat also rose by around 1%. The latter is attributed to a large demand for chicken meat from Asia and shortages of beef in America.NamibiaAccording to First Capital Namibia&#039;s biannual food price report, the latest of which was released in April, Namibia, as a net importer of food, is vulnerable to international food prices as well as the exchange rate – especially against the US dollar.As Namibia relies heavily on foreign markets for the import of maize and wheat, this exposes the country to external shocks in world markets, which affect commodity prices.This comes as food prices worldwide increased sharply in 2021 and 2022, mainly due to disruptions in supply chains, higher demand and higher input costs. This resulted in the global food index increasing by 31.5% on a year-on-year basis in April 2021 and remaining high in 2022 and so far this year."As a price taker, small countries like Namibia cannot withstand the impact of global disruptions in food chains as well as continuous increases."The biggest drivers of food inflation in Namibia are shocks in the supply chain as well as droughts, rising fuel prices and interruptions in international food chains. The Bank of Namibia is responding to the continuously rising inflation with the help of policies for the management of demand, such as by increasing the interest rate," the report notes.

Price relief in May for wheat, oils

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Namibian Sun 2025-11-07

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Price relief in May for wheat, oils

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Namibian Sun 2025-11-07

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