Regional Office for Asia and the Pacific

Record wheat production forecast for China and Pakistan in 2013

FAO food price index stable

Record wheat production forecast for China and Pakistan in 2013

Bangkok, Thailand, 07 Mar 2013 -- First forecasts for the 2013 wheat harvest point to production increasing to 690 million tonnes – 4.3 percent up on 2012. This would be the second largest crop on record, according to the latest issue of FAO’s quarterly Crop Prospects and Food Situation report (CPFS).

While the production increase is expected mostly in Europe, prospects for the 2013 wheat crop in the Far East are generally favourable with output expected to reach record levels in China and Pakistan. However, a slight decline is expected in India.

According to the CPFS report, “The 2012/13 main winter wheat and secondary rice crops, sown from October 2012 onwards, are in a critical growth stage in most countries. Weather conditions since the start of the season have been generally favourable in most countries with early rains benefitting planting and crop development.”

Hiroyuki Konuma, Assistant Director-General and Regional Representative for Asia and the Pacific, briefed the news media today on the food situation in Asia. He said that “the recently lower prices of wheat and, to some extent, maize kept the FAO Food Price Index unchanged at 210 points for the second consecutive month in February. That is 2.5 percent, or five points, less than in February 2012.” The FAO Food Price Index was also issued today, as was the FAO Cereal Supply and Demand Brief.

Over all, FAO’s latest forecast for world cereal production in 2012 has been revised upward by 4 million tonnes since the February 2013 figure to 2 306 million tonnes, but still 2 percent below the previous year’s record.

Since November 2012, the Index has moved within a narrow 210-212 point range as increases in the prices of dairy products and oils/fats were largely balanced out by declines in the prices of cereals and sugar.

Far East can expect overall favourable harvest prospects

The CPFS report says that early estimates in China point to a record 2013 aggregate national wheat output at 121.4 million tonnes. Similarly, wheat production is officially forecast to reach record levels at 24.7 million tonnes in Pakistan, following an estimated increase in planting and anticipated higher yields, reflecting relatively good prospects for irrigation water, provision of fertilizer and other inputs. But, in India, winter wheat production is expected to be 3 percent below the 2012 record harvest of 92.3 million tonnes.

Prospects for the irrigated secondary rice harvests in 2013 are good in Bangladesh, Cambodia, Indonesia, Myanmar, the Philippines, Thailand and Viet Nam, according to the CPFS report. “By contrast, in India a combination of planting delays and localized damage caused by Cyclone Nilam, particularly impacting southern producing states including Andhra Pradesh, are expected to reduce the 2012/13 Rabi paddy crop to 11.1 million tonnes, 12 percent down from the previous year’s dry spell reduced output and 20 percent below the previous 5-year average.”

Asia’s cereal exports are expected to reach a record level, while imports should decrease in 2012/13 in response to successive good harvests. Much of the expected increase in cereal exports will be due to bumper harvests in 2012 and anticipated favourable output in 2013.

In India, given the estimated record wheat harvest and larger carryover stocks, exports are anticipated to reach an all-time high at 7.5 million tonnes in 2012/13. Total wheat imports of the subregion are expected to decline by 1.3 million tonnes, 4 percent from last year’s level, owing to the favourable 2012 domestic wheat production in several importing countries such as China and Japan, and lower demand from the Philippines, Sri Lanka and Thailand.

For rice, following good harvests in most countries combined with weak demand from some importing countries, including China, Indonesia and the Philippines, the volume of 2012 trade, both exports and imports, is forecast to decrease according to the CPFS report. 

The Crop Prospects and Food Situation report focuses on developments affecting the food security situation of developing countries. In its review of food insecurity hotspots, the report says 36 countries around the world are in need of external assistance for food as a result of crop failures, conflict or insecurity, natural disasters, and high domestic food prices. Six of those countries are in Asia, with only one, Democratic People’s Republic of Korea (DPRK), in the Far East subregion. The other countries are: Afghanistan, Iraq, Kirgyzstan, Syria and Yemen.

The CPFS report says, that some areas of Afghanistan, “particularly in the extreme northeast and some higher elevations of the central highlands are faced with increased food insecurity due to loss of livestock and reduced remittances from the Islamic Republic of Iran.”

In the DPRK, the report says a dry spell in May-June 2012, followed by localized floods in July-August cut crop production and damaged agricultural infrastructure. Chronic food insecurity exists in the country, with 2.8 million severely vulnerable people requiring food assistance during 2012-13.

Lower cereal production in Kyrgyzstan makes the country dependent on the import of staple foods, and vulnerable to global food price rises, which adversely affect the purchasing power of the poorest families. Also, says the CPFS report, “Socio-political tensions still exist in Jalalabad, Osh and Batken Oblasts.”

Regarding international food prices, FAO’s Cereal Price Index averaged 245 points in February, down by just less than 1 percent from January, but still 8 percent higher than in February 2012. The FAO Oils/Fats Price Index averaged 206 points in February, up 0.4 percent from January. The rise was driven by palm oil, mainly reflecting the expected seasonal production slowdown and reduction in inventories from their current high levels.

The FAO Dairy Price Index averaged 203 points in February, 2.4 percent, or 5 points up from January,  representing the most substantial increase since September 2012.  The rise was principally a reflection of falling production in Oceania due to hot weather. 

The FAO Sugar Price Index averaged 259 points in February, down 3 percent, or 8.6 points, from January. Prices declined for the fourth consecutive month on the expectation of a relatively large world production surplus and improved export availabilities in 2012-13.

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