Near record number of countries face food supply problems and world cereal stocks remain below safe levels, according to latest FAO report

Although 1997 cereal harvests were slightly better than expected, the world's cereal stocks remain below minimum safe levels, according to FAO's latest Food Outlook. The report - released in February 1998 - also says that a near record of 37 countries face food supply problems in 1998. Many of them - particularly in Asia and Central America - have been hard hit by the latest El Niño - the warming of Pacific waters off the coast of Peru, which affects climate patterns the world over. The Outlook includes a special section on El Niño and countries with food supply problems. "Africa remains the continent with the most acute food shortages as a result of a combination of adverse weather and civil strife," according to the report.

FAO forecasts a rise in world cereal stocks to 295 million tonnes for 1998, up 5 million tonnes from 1997. According to the report, this modest increase in stocks is mainly caused by "larger supplies of coarse grains in Latin America and reduced import demand for animal feed in Asia". But at only 15.7 percent of global cereal consumption, world cereal stocks will still fall far short of the 17 to 18 percent of global consumption that FAO has identified as the minimum needed to protect against possible food shortages and emergencies. 

Mixed outlook for 1998 cereal crops

The outlook for 1998 cereal crops is mixed. Good wheat harvests are forecast in western Europe, North Africa and India. The report says, however, that "conditions are not favourable in China, Pakistan and parts of eastern Europe." The area planted to winter wheat is lower than expected in the United States, although conditions are good. The negative effects of El Niño have been less than expected in southern Africa and Latin America.

 

In a special section on the possible effects of the Asian financial crisis on food markets worldwide, the Outlook says that "only relatively small consequences" are anticipated - "with some exceptions". However, "substantial effects on markets in the region itself" are expected. The major impact at the global level will be felt through reduced import demand, with meat - and beef in particular - hardest hit. Asian imports of oilmeals and feedgrains for animal feed are also expected to fall. In the dairy sector, imports of milk powder will decrease.

The Outlook cautions that the effects of the Asian financial crisis over the long term are harder to predict. It indicates three areas of uncertainty - the length of time incomes and exchange rates take to recover, what trade policy measures governments take in response to the crisis, and what steps are taken to ease the credit shortage.

FAO calls for close monitoring of the global food supply situation in the coming months as "a deterioration in prospects for the 1998 crops could lead to price rises with serious consequences for the food security of many low-income food-deficit countries".

12 March 1998

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