Global Information and Early Warning System on Food and Agriculture

Food Outlook

No. 3/4, 1996 Rome, March/April 1996 ----------------


A recovery in cereal production is in prospect this year. If current forecasts materialize, 1996 cereal output would be sufficient to meet the expected consumption requirements in 1996/97. However, the anticipated increase in production would not allow any significant replenishment of cereal reserve stocks and global food security would remain precarious.

FAO’s first forecast puts 1996 world cereal production at 1 990 million tons, some 5 percent up from 1995’s reduced level. Assuming favourable conditions until harvest, wheat output is expected to increase by almost 5 percent to 570 million tons, that for coarse grains by about 9 percent to 860 million tons, while the paddy crop is tentatively forecast to change little from the 1995 level.

Food insecurity persists in several low-income food deficit countries, as a result of reduced domestic cereal harvests, combined with the high cost of cereal imports and declining food aid availabilities. In several countries the situation is further aggravated by continuing civil strife.

Global cereal utilization in 1995/96 is forecast to decrease by 2 percent. The bulk of the reduction is anticipated to be in feed use of cereals in the developed countries, which would more than offset an increase in food use by the developing countries.

Total food aid availabilities of cereals in 1995/96 are forecast at 7.6 million tons, 1.6 million tons less than the previous year’s. Food aid shipments to low-income food deficit countries would fall almost 20 percent to 6.5 million tons, which would cover only 8 percent of their total cereal imports, compared to 11 percent in 1994/95.

Export prices for wheat and coarse grains have continued to rise. For wheat, this mainly reflects concern over the outlook for the crop in the United States and, for coarse grains, continuing active import demand and tight stocks. Rice prices changed little during March after declining slightly in the previous month.

Global cassava production is expected to grow further in 1996, after a slight increase in 1995. Some recovery in world trade in cassava products is foreseen for 1996 following the contraction in 1995 due to tight supplies and high domestic prices in major exporting countries.

World output of oilseeds, oils and oilmeals is forecast to decrease in 1995/96. The tight supply situation is expected to keep prices of oilmeals and of most oils under pressure until the end of the season. As a result, consumption and trade in oils/fats and oilmeals are expected to decline.

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