Crop Prospects and Food Situation

, by Food and Agriculture Organization of the United Nations (FAO)

World cereal production in 2008 is forecast to increase 2.6 percent to a record 2 164 million tonnes. The bulk of the increase is expected to be in wheat following significant expansion in plantings in major producing countries. Coarse grains output is tentatively forecast to remain around the bumper level of last year. Rice production is foreseen to increase slightly reflecting production incentives in several Asian countries. However, much will depend on climatic conditions in the coming months.

Should the expected growth in 2008 production materialize, the current tight global cereal supply situation could ease in the new 2008/09 season.

International cereal prices have risen further in the past two months reflecting steady demand. Prices of rice increased the most following the imposition of new export restrictions by major exporting countries. By the end of March prices of wheat and rice were about twice their levels of a year earlier, while those of maize were more than one-third higher.

In 2007/08 the cereal import bill of the LIFDCs as a group is forecast to increase considerably for the second consecutive year. Prices of basic foods have soared in domestic markets across the world leading to social unrest in several countries in Asia, Africa and Latin America and the Caribbean. Governments of both cereal importing and exporting countries are taking a series of measures to limit the impact of higher international cereal prices on food consumption.

In the LIFDCs, as a group, early prospects point to another only marginal increase in 2008 cereal production. Excluding the largest countries, China and India, the output of the remaining LIFDCs is tentatively forecast to decline slightly.

In Southern Africa, where the 2008 main season cereal harvest is about to start, aggregate output is forecast to increase sharply from last year’s level. However, another reduced crop is anticipated in Zimbabwe. In North Africa, a strong recovery of winter cereal production is expected after severe drought in 2007.

In Asia, prospects for the 2008 wheat crop, already close to harvest, are favourable although outputs are forecast below the record levels of last year. In South America, a record 2008 maize crop is being gathered mainly due to larger plantings. In Central America, a good wheat crop is expected in Mexico.