FAO/GIEWS - Food Outlook No.4 - September 1999 p. 3

CEREALS

SUPPLY/DEMAND ROUNDUP

The outlook for world cereal production has improved somewhat since the last report. FAO's current forecast of the world cereal crop in 1999 is 1 870 million tonnes, 12 million tonnes higher than forecast in June but 0.7 percent lower than in 1998. However, at this level output would still be below consumption requirements and cereal stocks accumulated over the past three seasons would have to be drawn down by 4 percent to 323 million tonnes. As a result, the ratio of global cereal stocks in 1999/2000 to trend utilization in the following year would fall to 16.9 percent, close to the 17-18 percent range which the FAO secretariat considers the minimum necessary to safeguard world food security. With most of the 1999 cereal harvest complete, the overall global situation is unlikely to change significantly for the year. However, the food situation in a number of Low-Income Food-Deficit Countries (LIFDC) continues to give cause for concern.

FAO's forecast for 1999 wheat production remains virtually unchanged at 579 million tonnes, 2.7 percent lower than 1998. In Africa, wheat production has been revised down by 11 percent from the earlier forecast, while in Asia it is expected to increase by some 4.3 million tonnes, or about 2 percent. Output in North America has also been revised up by some 3 million tonnes, while in Europe it has been revised down by 7 million tonnes. Elsewhere in the northern hemisphere, wheat output in Central America remains largely unchanged from the previous year. In the southern hemisphere, the main 1999 wheat crop is growing under generally favourable conditions with a small increase in output anticipated. Another good crop is in prospect in Australia, pointing to a slight increase over last year. FAO's forecast for global coarse grains output in 1999 has been revised up by 8 million tonnes to 899 million tonnes, mainly due to larger than expected crops in Asia and North America. The 1999 coarse grains crop is forecast to remain virtually unchanged in Africa and Oceania. As regards rice, planting of paddy for the 1999 season has been completed in several northern hemisphere countries, while in the southern hemisphere and around the equatorial belt harvesting of the 1999 main paddy crop has been virtually completed under favourable conditions. Based on a favourable production outcome in the southern hemisphere so far, and indications of larger plantings among the main northern hemisphere producers, FAO now forecasts global rice output in 1999 at a record 585 million tonnes (or 392 million tonnes in milled basis), 2 percent higher than in 1998. However, this forecast remains tentative as much of the 1999 rice crop is at different stages of growth and still dependent on the performance of monsoon rains in Asia in the coming months.

FAO's forecast of world cereal imports in 1999/2000 has been revised up to 218 million tonnes, some 2 percent, or 5 million tonnes higher than in 1998/99. The increase in cereal trade this season is based on expectations of larger imports by the developed countries, especially by the Russian Federation. Total imports by the developed countries are forecast to expand by 5 percent to 60.5 million tonnes. Although aggregate cereal imports by developing countries are also expected to rise, the increase would be just over 1 percent to around 158 million tonnes. Imports by the Low-Income Food-Deficit Countries are forecast at 71 million tonnes, constituting around 33 percent of world trade. The forecast for global wheat imports in 1999/2000 has been raised to 101.5 million tonnes, 1.5 million tonnes higher than projected earlier and 3 million tonnes more than last year. This is mainly attributed to higher import demand in Asia. World imports of coarse grains are put at 94.5 million tonnes, some 2 million tonnes higher than last year. The expected rise in trade is seen mostly in maize, barley and sorghum. The forecast for international rice imports in 1999 has been revised up to 22.7 million tonnes, the second highest on record. Global rice trade next year is provisionally anticipated to remain around 22-23 million tonnes, similar to this year.

World cereal utilization in 1999/2000 is projected to be higher than forecast production and around 0.8 percent above last year. The rise in global utilization is slightly higher than was anticipated earlier, following an upward revision of consumption, particularly of rice and coarse grains. Overall, the growth in direct food consumption of cereals is expected to keep pace with population increase but the total volume of cereals used for animal feed is expected to decline for the second consecutive year. The bulk of this decrease, however, is anticipated to be in the developed countries, mainly due to a further contraction of the livestock sector in the Russian Federation. In contrast, given improved prospects for economic recovery in Asia, aggregate feed use is forecast to grow by at least 2 percent, indicating the first significant increase since the financial crisis.

International wheat prices have rallied somewhat since the last report. After declining to seasonally low levels during June and early July, the global wheat market was exceptionally volatile in early August, as prices were affected by weather-induced rallies in maize and soybean markets. By the end of August, U.S. wheat No. 2 (HRW, fob) was quoted at US$115 per tonne, up US$5 per tonne from the corresponding period in the previous year. Dry and hot conditions in late July/early August raised concerns for the maize crop in the United States. However, following an official report in August of a much larger than expected US crop, maize prices fell to US$70 per tonne, some US$14 per tonne below the corresponding period last year. International rice prices from most origins also weakened, as a result of new crop supplies in the market. The FAO Export Price Index for Rice (1982-84=100) averaged 114 points during July and August, down by 1 point from June.

Cereal utilization is forecast to exceed production and, hence, would require some drawdown of carryover stocks. The forecast for world cereal stocks by the close of the seasons ending in the year 2000 is put at 323 million tonnes, some 13 million tonnes, or 4 percent, below the reduced opening level. The contraction would be largely limited to wheat and barley, whereas rice inventories could increase. FAO is tentatively forecasting a 3 percent rise in global rice stocks, mostly in anticipation of record world production. At the current forecast level, the ratio of global cereal carryover in 1999/2000 to trend utilization in the following season would be 16.9 percent, approaching the 17 to 18 percent range which the FAO Secretariat considers the minimum necessary to safeguard world food security. Nevertheless, the moderate build-up of stocks in the major exporting countries in recent years, which represents an important buffer against any sudden global production shortfall, would keep their share at 45 percent of the global total, which is close to the previous year and significantly above the average share registered in recent years.

CURRENT PRODUCTION AND
CROP PROSPECTS

POSITION BY REGION

• ASIA
• AFRICA
• CENTRAL AMERICA AND THE CARIBBEAN
• SOUTH AMERICA
• NORTH AMERICA
• EUROPE
• OCEANIA

ASIA

Harvesting of the 1999 wheat crop is complete in the main producing countries. The estimate for aggregate production in the region has been revised up by some 4 million tonnes from the 253 million tonnes estimated in June. Overall production is now put at 257 million tonnes, around 2 million tonnes up on 1998, though well down on 1997's bumper crop of 266 million tonnes. Notwithstanding a serious drought last winter which affected the crop in several parts, the estimate of wheat production in China has been revised up from 105 million tonnes in June to 112 million tonnes. At this level output would be around 2 million tonnes up on last year. The final estimate of wheat production in India is a record 73.5 million tonnes, 7.6 million tonnes above last year and over 4 million tonnes above the previous record in 1997. A record wheat crop of 1.9 million tonnes was also harvested in Bangladesh, around 5 percent higher than last year's crop. In Pakistan about 18 million tonnes were produced, some 700 000 tonnes lower than last year, but over a million tonne or 7 percent up on the five year average.

Severe drought conditions have resulted in well below normal wheat production in several countries of the Near East, including Iraq, Islamic Republic of Iran, Syria, Jordan and Turkey. Similarly, production was sharply reduced in Afghanistan due to low precipitation and an outbreak of pests. In Saudi Arabia, production is estimated at 1.5 million tonnes, about 17 percent below last year.

In Kazakhstan, the aggregate area sown to cereals (mainly wheat) declined to 11.3 million hectares, but growing conditions have been mostly satisfactory and the area to be harvested may not be much less than last year's. Providing growing conditions remain favourable until the completion of the harvest and timely supplies of fuel are available, indications are that the 1999 grain harvest could recover to about 9 million tonnes including 7 million tonnes of wheat.

Turkmenistan achieved a record grain harvest of 1.5 million tonnes (mainly wheat) in response to better incentives, increased use of imported high-grade seed and fertilizer on a smaller area (570 000 ha). In Uzbekistan, state farms have already harvested 3.1 million tonnes of wheat and barley. Given that households also have a higher wheat grain production target, (which in general they do meet) and maize and paddy harvests remain close to last year's level, the 1999 harvest of cereals could remain close to last year's 4.3 million tonnes including about 3.6 million tonnes of wheat. Elsewhere in the region, however, the outlook is for lower cereal harvests. In Kyrgyzstan, the trend to diversify out of grains has continued and wheat production in 1999 is expected to be somewhat less than last year. Heavy rains have caused localized crop damage. In Tajikistan, the harvest is likely to be a poor 430 000 tonnes in response to a sharp reduction in the area sown and lower yields. In the Caucasus, the outlook is also for reduced cereal crops in 1999. In Armenia winter grain plantings are 5 percent less than last year and dry conditions adversely affected the wheat crop. In Azerbaijan, winter grain plantings were well below average and output of cereals, mainly wheat, could decline by up to 20 percent. In Georgia, the area sown to wheat declined by 14 percent and hot and dry conditions are currently stressing the major maize crop.

Prospects for 1999 coarse grain production in the region remain satisfactory, with an overall output of 226 million tonnes forecast compared to the 223 million tonnes last year. Aggregate production in China is projected at 147 million tonnes, up 5 million tonnes on last year. The increase is largely attributed to higher maize production which is forecast at around 130 million tonnes, the largest crop in three years, up 4 percent or 5 million tonnes on 1998. Prospects are also favourable in India, where monsoon rains have been satisfactory so far, and have encouraged some increase in the area planted to coarse grains. Maize production in Indonesia is forecast to be some 10 percent lower than last year as a result of a decline in area planted of around 400 000 hectares. The aggregate output of coarse grains in 1999 in the 8 CIS countries in Asia is expected to remain stable at around 3 million tonnes. Better yields in Kazakhstan could offset lower crops elsewhere, notably in the Caucasus and Tajikistan.

The outlook for Asia's 1999 paddy crop is very favourable, assuming no disastrous weather patterns for the rest of the season. The monsoon rains started on time, or even a bit early, which helped prevent planting delays and benefited crops in their early stages of development. Despite a few and isolated cases of flooding, no major damage has been reported to rice crops so far. Paddy output is forecast to expand by about 7 million tonnes from the previous season to a record of 531 million tonnes.

Harvesting of the single-rice (autumn) crop in China is underway while gathering of the double early-rice (summer) crop, the first and smallest of the three crops, is virtually complete. Although the official estimate is not yet available, the expectation is for lower output from the early-rice crop than last year. This is partly attributed to a 2 percent decline in planted area in response to a change in the Government's grain procurement policy that led to the lowering of the state purchasing prices for inferior quality grains, among which is early rice. Planting of the double late-rice (winter) crop is in progress and some replanting may be necessary as heavy rains in June and July inflicted some damage to crops but not to the magnitude incurred last summer. In Viet Nam, harvesting of the winter-spring crop for the 1998-99 season is complete, while gathering of the summer-autumn rice crop is nearing completion in the south. Although there were a few reported cases of flooding in southern Viet Nam, the impact on crop yields was not significant. In the Philippines, harvesting of the main-season crop normally starts in September and, based on current reports, the floods in early August have not adversely impacted on rice crops. Assuming favourable conditions for the rest of the season, the expectation is for an increase of 10 percent in the 1999 paddy output to slightly more than 11 million tonnes.

Although Thailand received heavy rains during July and August, incidents of flooding have been described as isolated and the impact on rice crops has been minimal. The situation is, however, being closely monitored as the country is most vulnerable to flooding during August and September. Harvesting of the 1998-99 secondary season paddy crop is complete and a paddy output of over 4 million tonnes is estimated, which is much above earlier expectations as the crop benefited from unusual rainfall during March and April. Harvesting of the 1999-2000 main-season crop is expected to start in October and the Government forecasts production of about 18.9 million tonnes of paddy, up 3 percent on last year. In Myanmar, harvesting of the main-season crop is expected to start in October and planting of the secondary crop in November. The 1999 paddy output is forecast at 17.5 million tonnes, close to last year's level. In Japan, rice crops are reported to be growing under generally favourable conditions and harvesting is set to begin in September. Area planted to rice was reported to be about 1.8 million hectares, unchanged from last year. In Cambodia, planting of the 1999-2000 wet season crop is almost complete; replanting was done in some areas as seedlings were destroyed by early rains. The Government anticipates an expansion in rice area and production. Reports from the Democratic People's Republic of Korea indicate that the 1999 paddy output could be reduced by a combination of drought at the beginning of the growing season in June and heavy rains in early August. Floods were also reported in some parts of the Republic of Korea during late July/early August after a period of drought over most of June. However, the impact of the floods on total output is not expected to be significant. The area planted to rice in 1999 was similar to the previous season at about 1.1 million hectares and, paddy output is forecast at 6.9 million tonnes.

In Bangladesh, some localised flood damage to rice crops is reported in a few districts. Harvesting of the 1999-2000 Aus crop is in progress but output could be lower than originally anticipated due to localized flooding, pest infestations and shortages of essential inputs. However, the overall impact on the country's paddy production should be minimal since the Aus harvest accounts for only a small portion of total output. Planting of the Aman (main season) crop is nearing completion but seed distribution was reported to be inadequate. For the 1998-99 season, paddy output from the mostly irrigated Boro crop is now estimated at about 10 million tonnes, or 23 percent higher than the 1997-98 Boro crop, reflecting mainly an expansion in the area sown and greater use of hybrid seeds. This increase more than offset the flood-inflicted losses of last summer, resulting in an upward revision of the estimate for the country's 1998-99 paddy output by over 1 million tonnes to a record 29.5 million tonnes. In India, planting of the main season Kharif rice crop is complete in some parts of the country and nearing completion in others. In Punjab and West Bengal, there are reports of an area shift from cotton and jute to rice. In Madhya Pradesh, the transplanting of rice has been slow due to inadequate rain. Assuming normal growing conditions for the rest of the season, total paddy output in 1999 is tentatively forecast at 128 million tonnes, slightly above the previous year's level. In Pakistan, planting of the 1999 paddy crop has been completed. However, harvesting of the crop, which usually starts in October, could be delayed by at least one month, particularly in the lower Sindh area, where some crops had to be replanted due to flood damage. In the Islamic Republic of Iran, the 1999 rice crop has been hit by the worst drought in 30 years. Although the country did finally receive some rain towards the end of July, these caused some flooding, inflicting further damage to farmlands. The 1999 paddy output is provisionally forecast to fall by 18 percent from the previous season to 2.3 million tonnes. A number of measures are being implemented by the Government to help farmers deal with the losses incurred. They include new credit facilities to affected farmers, rescheduling of outstanding loans and a variety of aid and compensation packages.

In Indonesia, harvesting of the 1999 main-season rice crop is virtually complete and planting of the secondary crop is nearing completion. Paddy output is forecast at about 49.5 million tonnes, up 300 000 tonnes on 1998 reflecting a 2 percent increase in yields. In Malaysia, harvesting of the main-season crop is almost complete. The country's 1999 paddy production is expected to be close to last year's level of about 2 million tonnes. In Sri Lanka, harvesting of the Maha (main) paddy crop is complete but crop losses and quality deterioration due to heavy rains at harvest time are reported. Planting of the Yala crop is virtually complete. Overall, total paddy output is projected to increase slightly from the previous year to 2.7 million tonnes, although the Government had targeted a paddy output of over 3 million tonnes for 1999.

AFRICA

NORTHERN AFRICA: The subregion's 1999 wheat crop is estimated at about 13 million tonnes, some 9 percent below the level of 1998 but slightly above the 5-year average. In Algeria, production is estimated at 1.5 million tonnes, an increase of 50 percent on the previous year, but slightly below the 1996 record level. Output in Morocco is estimated at 2.1 million tonnes, which is less than half of the 1998 level, as a result of inadequate rainfall and reduced plantings. Production in Tunisia is estimated at 1.2 million tonnes, some 9 percent below last year's output. The mostly irrigated wheat crop in Egypt is estimated at 6.3 million tonnes, an increase about 4 percent.

The subregion's 1999 aggregate coarse grains crop is estimated to reach 11 millions tonnes, which is slightly above last year's level. Production is anticipated to remain stable in Egypt and Tunisia, while output is expected to increase by 50 percent in Algeria. In contrast, output is estimated to drop by 24 percent in Morocco as a result of drought.

In Egypt, planting of the 1999 rice crop is complete in both the northern and southern areas. Growing conditions are reported to be good and the availability of inputs sufficient. Indications are that rice area expanded by 30 percent to 675 000 hectares and that a 33 percent increase in paddy output to almost 6 million tonnes could be achieved.

WESTERN AFRICA: Crop prospects are good reflecting generally favourable growing conditions so far. Rains were regular, widespread and often above normal in July and August over most agricultural zones of the Sahel. Harvesting of coarse grains will start in late September/October. In the countries along the Gulf of Guinea, crop prospects are also favourable. Good rains in late July/early August, notably in Benin and Guinea, caused localised flooding. However, in Sierra Leone, where insecurity continues to disrupt agricultural activities, output may not change significantly from last year's reduced level despite favourable climatic conditions so far and the signing of a peace agreement in early July.

The 1999 paddy season is progressing well under generally favourable conditions, although insecurity continues to disrupt agricultural activities in Sierra Leone. In Nigeria, the largest producer in the region, the Government has re-introduced a 25 percent subsidy on fertilisers and this is expected to lead to increased use. The subsidy had been abolished as part of the Structural Adjustment Programme requirements.

CENTRAL AFRICA: In central Africa, coarse grains are currently growing under generally favourable conditions in Cameroon and Central African Republic. Intensified civil strife in the Republic of Congo has disrupted agricultural and marketing activities, pointing to another reduced harvest in 1999, while prospects in the Democratic Republic of Congo remain uncertain depending on developments in the security situation following the recent cease-fire agreement.

EASTERN AFRICA: The early outlook for the sub-region's 1999 wheat crop is mixed. In Sudan, where the crop was harvested earlier in the year, latest estimates indicate an output of 165 000 tonnes, 70 percent below both last year and the average for the last five years due to lower planted area, late sowing and high temperatures. In Kenya, prospects for the crop are unfavourable due to drought conditions during the season. In Ethiopia, rains in July and August have favoured establishment and development of the wheat crop.

Prospects for the 1999 coarse grains are generally unfavourable in several countries of the subregion, mainly due to drought and pests. By contrast, in Sudan, Ethiopia and Eritrea, where crops are at the developing stage, prospects have improved as a result of rains in July and August. In Somalia, despite some improvement on last year's sharply reduced harvest, the 1999 "Gu" output, is forecast to be 27 percent below the post-war (1993-98) average of about 185 000 tonnes. In Kenya, the maize crop being harvested and the output is forecast to be below average, while in Tanzania, latest coarse grains production forecasts indicate an output of 3.1 million tonnes, about 7 percent below the previous five year average. In Uganda, where harvesting of the 1999 first season coarse grain crop is well advanced, output is forecast to be below average due to drought in some major producing areas. In Burundi and Rwanda, inadequate rainfall affected the recently harvested 1999 B season coarse grain crops.

Paddy production in Eastern Africa is expected to fall from last year's level above average harvest mostly due to inadequate rain. Rice harvesting is complete in Tanzania, the major rice producing country in the region, and output for 1999 is provisionally estimated at about 800 000 tonnes, down by 20 percent from last year. In addition to erratic rains, reduced use of fertilisers contributed to lower yields.

SOUTHERN AFRICA: FAO's latest estimate of the sub-region's aggregate 1999 coarse grain crop indicates an output of 15.2 million tonnes, only slightly above last year's output. Despite a good start of the rainy season, production was affected by excessive precipitation in the middle of the season and a subsequent prolonged dry spell. In South Africa, latest official estimates of the 1999 maize crop have been revised upwards to 7.5 million tonnes following favourable weather during the harvest. At this level, production is still 8 percent below the reduced crop of last year and 22 percent lower than the average of the past five years. In Angola, despite above average and well distributed rains, production of maize declined by 15 percent due to renewed civil conflict and massive population displacement. By contrast, in Malawi, a bumper coarse grain crop was gathered following abundant rains during the season. The maize output is estimated at 2.4 million tonnes, one-third higher than the normal level of last year. In Mozambique, coarse grain production increased for the fifth consecutive year to 1.5 million tonnes, reflecting a slight increase in plantings and higher yields. In Zambia, coarse grain production recovered from the poor crop of last year. Maize output is estimated at 1 million tonnes. In Swaziland, production of maize is provisionally estimated at 112 000 tonnes, 18 percent lower than the good level of 1998. A prolonged dry spell resulted in yield reductions. In Botswana, Lesotho, Namibia and Zimbabwe, coarse grain production remained below average due to dry spells and high temperatures.

Prospects for the 1999/2000 wheat crop, to be harvested in October/November, are uncertain. Dry weather at planting resulted in a decrease in the area planted and lowered yields. As a result the sub-region's aggregate wheat output could fall below the previous year's already reduced level.

Harvesting of the 1999 paddy crop is complete in the region. Output in Madagascar, which accounts for over 90 percent of the subregion's rice production, is estimated at about 2.6 million tonnes, up 8 percent on last year's. Although the onset of the season was delayed, rainfall during the season was abundant. In Mozambique, harvesting of the paddy crop is complete. As growing conditions have been favourable, output is expected to remain close to or even exceed last year's record of 192 000 tonnes.

CENTRAL AMERICA AND THE CARIBBEAN

Harvesting of the 1999 wheat crop in Mexico, virtually the sole producer in the sub-region, has been completed and output is provisionally estimated at 3.4 million tonnes, slightly below-average. Higher production had been forecast earlier, but yields were affected by extreme dry weather in the northern states of the country. Water reservoirs in the large producing states of Sonora and Sinaloa were reported practically dry during the crop growing stage.

Harvesting of the 1999/2000 first season coarse grains is about to start in most Central American countries. A recovery in maize production from the 1998 hurricane "Mitch" affected crops is anticipated in El Salvador, Guatemala and Nicaragua, although in the latter country output is likely to be lower than expected as a consequence of poorly distributed rains and the incidence of plant diseases. In Honduras, maize production is forecast to be below average because of reduced plantings caused by unattractive prices. In Costa Rica, a near-average maize production is expected. In Mexico, the maize harvest of the spring/summer crop (planted in the fall/winter of 1998/99) from the large producing areas of the northwest, such as Sinaloa, was reduced because of below-average yields due to drought; however, the good results obtained in other important growing states, such as Oaxaca and Chiapas, have partly offset these losses. Planting of the main spring/summer crop for harvest from October has been completed and a slightly lower area than last year's is provisionally estimated. An aggregate 1999 maize output of some 18.1 million tonnes is forecast which is close to the average of the last five years. Harvesting of the 1999 sorghum crop is due to start from October and an above-average output, close to last year's, is anticipated. In the Caribbean, in the Dominican Republic, harvesting of the 1999/2000 first maize and sorghum crops has been completed, while land is being prepared for planting of the second season crop to start from September. Overall, the outlook is good and outputs, particularly that of maize, are expected to recover from last year's hurricane affected crops. In Haiti, harvesting of the 1999/2000 first season maize crop is about to be completed and an average output is anticipated. In Cuba, normal rains have resumed but considerable moisture deficits are still reported in several parts of the country where minor foodcrops and fruits have been adversely affected following months of drought.

SOUTH AMERICA

Planting of the 1999/2000 wheat is well advanced in most countries in the southern part. In Argentina, weather conditions have been generally favourable, with the exception of some areas where planting has been delayed because of excessive humidity. Increased plantings over last year's are anticipated, but the area planted would still be below average. In Brazil, planting has been completed and an output of about 2.3 million tonnes is forecast, close to last year's average. In Uruguay and Paraguay, planting is well underway and above-average outputs are expected, assuming favourable weather conditions continue. In the Andean countries, in Bolivia, planting of the 1999 winter wheat crop, mainly in the eastern Department of Santa Cruz, has been completed and reduced plantings are reported. This is principally the result of delayed and irregularly distributed rains. In Peru, the bulk of the 1999 wheat harvest has been completed and about 51 000 tonnes have been collected during the period January/June which compares with 61 000 tonnes for the same period last year. Total output for the year is expected to be slightly below average. In Ecuador, harvesting of the main wheat crop, mostly grown in the highlands, has been virtually completed and an average output is anticipated.

Harvesting of the 1999 coarse grains crops is complete in most of the southern countries. In Argentina, maize output is provisionally estimated at 13.5 million tonnes compared to the 1998 record of 19.4 million tonnes. In Brazil, harvesting of the first (main) maize crop and planting of the second season crop ("safrinha") have been completed. An aggregate output of 32.4 million tonnes is forecast, compared to last year's production of 29.3 million tonnes. In Uruguay and Paraguay, average and above-average outputs respectively have been collected. In Chile, land is being prepared for planting of the 1999/2000 maize crop. In the Andean countries, in Bolivia, land is being prepared for planting of the 1999/2000 first season coarse grain and potato crops to start from late September. In Ecuador, harvesting of the 1999 winter (main) maize crop is almost complete while that of the summer crop is due to start from October. A combined output of some 600 000 tonnes for both crops, which is average, is anticipated. In Peru, the bulk of the 1999 maize crop (white and yellow) has been harvested and a decrease in production from 1998 record is expected, but output will still be slightly above average. In Colombia, harvesting of the first (main) maize crop is underway and a slightly below-average output is forecast, while in Venezuela, an average output of about one million tonnes of maize is provisionally estimated.

Harvesting of the 1999 paddy crop is complete in the region and output is estimated at a record 20.8 million tonnes, up 3.8 million tonnes on last year's crop which was affected by El Niño-related weather anomalies. In Argentina, the Government's initial production estimate has been raised by 200 000 tonnes to a record 1.7 million tonnes reflecting high yields of 5.8 tonnes per hectare. In Brazil, the region's largest rice producer, output is estimated at 11.4 million tonnes, 34 percent up from 1998 due to better yields and a 16 percent increase in the area planted to 3.7 million hectares. In Uruguay, paddy harvest is officially estimated at a record of 1.2 million tonnes, 40 percent higher than the previous season, a consequence of larger area planted and higher yields. By contrast, the Government in Bolivia has estimated paddy output at 210 000 tonnes, 30 percent lower than the previous season, following a contraction in the area planted.

NORTH AMERICA

In the United States, the winter wheat crop has been harvested and latest official estimates put output in 1999 at 46 million tonnes, 10 percent down from the 1998 crop. Although yields are estimated to be virtually unchanged, the area planted last autumn fell sharply. The spring wheat harvest was reported to be about 40 percent complete by late August. Latest forecast put the total spring crop at about 17 million tonnes, 7 percent down from 1998. Most of the reduction is due to lower durum wheat yields. Total wheat production in 1999 is thus currently forecast at 63 million tonnes, about 9 percent down from last year. In Canada, the wheat harvest is just getting underway under generally satisfactory conditions. The latest official forecast, based on end-July information, puts the total 1999 wheat output at 25 million tonnes, up about 1.5 million tonnes from earlier expectations and slightly above the 1998 crop. A significant decline in durum wheat production is expected to be more than offset by increased production of other spring wheat.

Prospects for the 1999 maize crop in the United States have deteriorated since early July due to unfavourable dry conditions and extreme high temperatures in some key-producing areas in the last two dekads of July. The latest official forecast of the 1999 maize crop, based on 1 August crop conditions, is 243 million tonnes, about 2 percent down from the above-average crop in 1998. However, after continuing deterioration of crop conditions during August, it is likely that a significant downward revision will be made in the next report. In Canada, the 1999 coarse grain crop is expected to be similar to the previous year's at about 26 million tonnes.

In the United States, planting of the 1999 paddy crop is complete. Crops are reported to be in good condition and four of the six rice producing States are expecting record crops, assuming favourable growing conditions for the rest of the season. Overall, USDA is anticipating an all-time high output of 9.7 million tonnes, 14 percent up on last year.

EUROPE

FAO's latest forecast puts aggregate 1999 cereal production in the EC at 200 million tonnes, about 5 percent down from last year but still above the average of the past 5 years. The smaller crop expected reflects reduced areas due to a 5 percent increase in the compulsory set-aside requirements and adverse weather. Generally less favourable weather than last year during the winter and dry conditions in the spring in southern parts is expected to result in lower average yields notably for wheat. Wheat output is forecast at 97.2 million tonnes, 5 percent down from 1998, while aggregate output of coarse grains is forecast to fall by about 6 percent to 100.1 million tonnes. In the EC, the 1999 paddy season is underway. Current indications point to an area of 400 000 hectares and to an output of 2.6 million tonnes, virtually unchanged from last year.

Throughout the eastern European countries, with few exceptions, 1999 cereal production is also expected to decline compared to last year. In Albania, an FAO/WFP Crop and Food Supply Assessment Mission in July forecast cereal output in 1999 to fall by 23 percent to 0.5 million tonnes (including 0.3 million tonnes of wheat) due to excessive rains in the autumn planting season and area diversion to more lucrative cash crops. In Bulgaria, 1999 wheat output is forecast to drop, by 20 percent, to 2.6 million tonnes due to smaller plantings and reduced fertilizer applications. In Croatia, the area sown to winter wheat was reduced sharply and, compared to 1998, output is forecast to halve to 500 000 tonnes. The area sown to spring grains also fell sharply and the aggregate 1999 cereal output will be only 2 million tonnes, two thirds of the previous year's. In the Czech Republic, better overall yields than last year are expected to more than offset the reduction of 9 percent in the area sown. Aggregate cereal output in 1999 is officially forecast to increase by 3 percent to 6.9 million tonnes. In Hungary, this year's wheat output is forecast to fall to 3.1 million tonnes, nearly 40 percent down from the 1998 crop. Farmers' incentives to plant wheat last autumn were dampened due to marketing problems and adverse weather and the area sown was sharply reduced. Moreover, this year's crop was affected by severe flooding and torrential rains. The final wheat area for harvest in 1999 fell 36 percent, to 765 000 hectares. By contrast, the area sown to coarse grains increased by 3 percent and output is expected to increase by 5 percent. In the Former Yugoslav Republic of Macedonia, an FAO/WFP Crop and Food Supply Assessment Mission found that growing conditions for the winter wheat crop have been satisfactory and output is forecast to increase by 4 percent to 378 000 tonnes. Adequate Inputs for the spring grain crop were also available, and given normal weather, the aggregate cereal output is forecast at 0.8 million tonnes, remaining close to last year's level.

In Poland, the aggregate area sown to cereal crops declined by 3 percent but the impact of reduced use of inputs has been less than expected earlier and the aggregate harvest is forecast to be about 1 million tonnes, or 4 percent, less than last year's. Output of wheat is now tentatively forecast at 9.3 million tonnes compared to the bumper crop of 9.5 million tonnes in 1998. Output of coarse grains is tentatively forecast to decline by 5 percent to 16.8 million tonnes. In Romania, the 1999 wheat harvest reached only 4.7 million tonnes, compared to 5.2 million tonnes in the previous year. The reduction in the area sown last August was exacerbated by crop damage due to floods and torrential rains in the summer. In addition, farmers' financial difficulties constrained their use of inputs. By contrast, the summer maize crop is expected to recover to about 10.5 million tonnes from last year's low level. If achieved, this would bring the aggregate cereal harvest to 16.3 million tonnes, compared to 15.5 million tonnes in 1998. In the Slovak Republic, cereal production in 1999 is expected to be reduced. Winter wheat planting fell to about 270 000 hectares, well short of the target of 400 000 hectares, due to adverse weather and economic problems faced by the farmers Spring grain plantings did not increase sufficiently to offset the reduction and the crop has been affected by dry conditions. In Slovenia, the winter wheat area is estimated to be 16 percent down from the previous year and adverse late season growing conditions have led to a 19 percent fall in production to 155 000 tonnes. Spring grain yields have been affected by poor weather in June and July and aggregate output is expected to be sharply less. In the Federal Republic of Yugoslavia, apart from the severe reduction in cereal output expected in the Kosovo Province this year because of the impact of the humanitarian crisis, the wheat harvest was reduced as a result of lower plantings and yields and untimely heavy rains during the harvest. The outlook for spring coarse grains remains uncertain: even if planting targets were achieved, yields are likely to be affected by the July floods, economic problems and civil disruption.

In the CIS countries west of the Ural mountains, the outlook for the 1999 cereal harvests is mixed. Growing conditions in many areas have been characterized by dry conditions during the autumn planting season, a mild winter followed by frosts in May and hot, dry conditions in June/July, followed by more favourable weather in July/August. Mixed, and in some areas unfavourable growing conditions have been exacerbated by severe economic problems and administrative controls, whose effect on the ongoing harvests are difficult to assess. Indications are that in Belarus, despite official exhortations to increase the area sown to cereals, the 1999 grain harvest could be somewhat less than last year's 4.8 million tonnes, falling well short of the revised official target of 6 million tonnes. Output of wheat is provisionally forecast to remain close to last year's level of 788 000 tonnes but the yield of spring coarse grains could be even lower than last year's. In Moldova, early indications are that the 1999 wheat harvest could fall by about 20 percent to below 800 000 tonnes; the aggregate cereal harvest is likely to be less than last year's 2.5 million tonnes, but the final result will depend on the outcome of the maize crop. In the Russian Federation, early harvest returns indicate that the damage by the May frosts has not been as far reaching as was expected earlier. But chronic fuel shortages are slowing the harvest. The outlook remains for an increase in the 1999 grain harvest, possibly to about 60 million tonnes, despite an 8 percent decrease in the area sown and unfavourable growing conditions notably in parts of the North Caucasus and the Volga Valley. The yields of winter grains are markedly better than last year's and could offset the 8 percent reduction in the winter grain area to be harvested (11.3 million ha). The spring grain area also fell by 8 percent and hot and dry conditions have sapped yield potential except in the Urals and Siberia where crop condition is mostly good, despite some severe but localized damage to crops by locusts. In the Ukraine, official harvest estimates continue to be lowered as the harvest progresses in part as maize yields were affected by the hot and dry weather in June and July and an increasing proportion of the maize area is being used as green fodder. However, in addition to the growing conditions outlined above, harvest returns are thought to be influenced by the need to barter grain for fuel and other inputs, the high prices for fuel during the peak of the harvest and increased efforts by the authorities to recover debts incurred in previous years. FAO's tentative forecast of the 1999 grain harvest is about 27 million tonnes, including some 14 million tonnes of wheat.

In the Baltics, where the hot and dry conditions have been less pronounced, especially in Lithuania, the outlook is for the 1999 wheat harvest to remain close to last year's level (1.6 million tonnes) and that of coarse grain to increase marginally. In the Federal Republic of Yugoslavia, (Serbia and Montenegro) the 1999 wheat harvest is officially put at 2.2 million tonnes, some 27 percent less than the output in 1998. Despite disruptions caused by the war and shortages of fuel and spare parts, the area sown to spring coarse grains is reported to have increased somewhat. In Croatia the 1999 wheat harvest has roughly halved and the coarse grain area sown is also sharply less reflecting mainly economic problems and excessive rains. In Bosnia Herzegovina the current outlook is for both wheat and coarse grain production to remain stable at about 200 000 tonnes and 900 000 tonnes respectively.

OCEANIA

In Australia, the outlook for the 1999 winter wheat and coarse grain crops is satisfactory so far. The area sown to wheat increased marginally this year to nearly 12 million hectares. Although dry conditions initially delayed plantings, growing conditions improved subsequently and another good harvest, of nearly 21.85 million tonnes, 4 percent more than last year's, is expected provided the weather remains favourable until the harvest as of October. By contrast, the area sown to barley and oats declined by 9 and 6 percent respectively, pointing to somewhat lower harvests. Output of barley is currently expected to decline by 8 percent to 4.8 million tonnes. Indications are that output of oats could remain stable. The 1999 paddy harvest is almost complete and reflecting favourable growing conditions throughout the season, output is forecast to reach 1.35 million tonnes, up slightly from the previous season and close to the record established in 1997.