FAO/GIEWS - Food Outlook No.5, November 1998

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FOOD AID




Cereal food aid shipments in 1997/98 remained low but could rise sharply in 1998/99

Total cereal food aid shipments in 1997/98 (1 July through 30 June) under programme, project and emergency food aid are estimated to have reached 5.3 million tonnes, close to the previous year's level and to the minimum commitments agreed under the 1995 Food Aid Convention (FAC). Based on the latest information received from the World Food Programme (WFP), slightly more food aid in terms of cereals was destined to Low-Income Food-Deficit Countries in 1997/98, mostly to Asia. In Africa, shipments to the sub-Saharan region rose a little while those to northern Africa fell; total shipments to the continent remained close to the previous year’s reduced volume.

FAO's first forecast of cereal food aid shipments in 1998/99 points to a 3.7 million tonnes increase to 9 million tonnes (Table A.10). This year’s greater availability of grain supplies, notably of wheat, maize and barley, among the major donor countries, combined with higher food aid needs, particularly from Asia, Central America and the CIS, is expected to result in an upturn in cereal food aid shipments after four years of decline. Triggered by relatively low international grain prices and large grain stocks, mostly in the EC and the United States, food aid availabilties have been growing in recent months. The United States announced in July that it would increase its wheat donations by up to 2.5 million tonnes, most of which has already been allocated. On the demand side, the ongoing financial and economic turmoil affecting the economies of many food import-dependent countries, has raised the need for food aid. The slower growth of the world economy combined with falling cash crop prices and export earnings could force some developing countries to sharply cut back on their imports of essential foods. Thus, for the bulk of the countries experiencing severe food emergencies this year, the decline in grain prices would not necessarily result in increased commercial cereal imports, and food aid requirements would remain substantial.

Among the main recipient regions, the need for food aid is expected to rise the most in Asia, reflecting the difficult food situation particularly in Bangladesh, Indonesia and the Democratic Republic of Korea. Compared to last year, cereal shipments to Asia as food aid are forecast to increase by some 2.2 million tonnes. Similarly, shipments to the CIS could also increase substantially while in the aftermath of hurricane "Mitch" in Central America, food aid to the affected countries is likely to rise. Wheat would account for the bulk of the increase of cereal shipments, although rice and maize donations would also expand. Among the major donors, total shipments from the United States are expected to double and reach some 4.5 million tonnes, representing one-half of the global volume. Likewise, food aid from the EC could also increase significantly.

FOOD AID SHIPMENTS - CEREALS (July/June)


1994/95 1995/96 1996/97 1997/98 1998/99
f’cast

( . . . . . . . thousand tonnes . . . . . . . )
WORLD 9 443 7 397 5 298 5 344 9 000
LIFDC 7 910 6 400 4 447 4 838 8 000
Africa 3 593 2 526 1 960 2 014 2 000
Sub-Saharan 3 348 2 305 1 770 1 912 1 900
Others 246 221 190 102 100
Asia 4 067 3 911 2 388 2 762 5 000
East Asia and SE Asia 308 877 646 933 2 000
South Asia 1 600 1 210 905 1 136 2 300
Others 2 160 1 824 837 693 700
Latin America and the



 
Caribbean 1 146 602 596 374 600
Others 637 358 354 194 1 400

SOURCE: 1994/95 - 1997/98, WFP; 1998/99 forecast, FAO
Note: Totals computed from unrounded data.



Shipments of non-cereals in 1997 fell to their lowest volume since the early 1980s

According to WFP, non-cereals accounted for about 11 percent of total food aid shipments in 1997 (January-December) 1/. Global food aid shipments in terms of non-cereal food commodities fell for the fourth consecutive year and reached 650 000 tonnes, down 280 000 tonnes, or 30 percent, from the 1996 reduced volume, and the lowest level since the early 1980s. Sharply reduced shipments of pulses, especially from the United States, accounted for most of this decline, but those of nearly all other major non-cereal food commodities were also smaller than in the previous year. The decline in shipments affected the CIS and sub-Saharan Africa the most.

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1/ While cereal shipments are monitored on a July/June basis, shipments of non-cereals are monitored on a calendar year basis. The year 1998 is not yet complete.



Contributions to IEFR and PROs are set to increase in 1998

Compared to 1996, contributions to the WFP administrated International Emergency Food Reserve (IEFR) rose in 1997 by about 142 000 tonnes, to nearly 993 000 tonnes for cereals, but fell, by about 30 000 tonnes, to 167 000 tonnes, for non-cereals. Based on the pledges to-date, total contributions for 1998 are likely to exceed those in 1997. As of October 1998, pledges to the 1998 IEFR have reached almost 1.4 million tonnes for cereals and 141 000 tonnes for non-cereals (Table A.11), compare with 651 000 tonnes for cereals and 142 000 tonnes for non-cereals pledged by October 1997. Contributions to the 1997 Protracted Refugee Operations (PROs), also directed by the WFP, amounted to about 529 000 tonnes for cereals and 70 000 tonnes for other food commodities, slightly higher than the 495 000 tonnes for cereals and 85 000 tonnes for non-cereals in 1996. By October 1998, some 517 000 tonnes of cereals and 94 000 tonnes of non-cereals have already been pledged under the 1998 PROs, suggesting that the totals for 1998 will exceed those of 1997.


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