CEREALS

SUPPLY/DEMAND ROUNDUP

The cereal supply and demand outlook has changed relatively little since the last report in June. Latest information on the 1996 cereal crops continues to point to a recovery in world production after the sharply reduced harvest last year, but the global supply/demand situation will remain tight in 1996/97. Based on many firmer estimates for crops already harvested, and the condition of those still in the ground, and assuming normal weather until the end of the harvests, FAO’s latest forecast of world 1996 cereal output is 1 821 million tons (including milled rice), 5.2 percent up from 1995 and close to trend. At this level, aggregate world cereal production would be large enough to meet expected consumption needs in 1996/97 and some replenishment of cereal stocks could occur. However, after their sharp reduction in the previous season, cereal reserves would still remain well below minimum safe levels. Consequently prices of most cereals which have now fallen considerably from their high levels in April-May, are expected to remain relatively firm compared to earlier years. This, combined with the anticipated low food aid availabilities in cereals in 1996/97, will continue to threaten the food security of many Low-Income Food-Deficit Countries (LIFDCs), particularly those which depend on imports to meet a large part of their food requirements.

WORLD CEREAL PRODUCTION, SUPPLIES, TRADE AND STOCKS

SOURCE: FAO
1/ Data refer to calendar year of the first year shown. Rice in milled equivalent.
2/ Tentative forecast.
3/ Production, plus opening stocks.
4/ July/June basis for wheat and coarse grains and calendar year for rice.
5/ Does not equal the difference between supply and utilization due to differences in individual country trade years.

In many countries in Africa and other parts of the world serious food supply difficulties persist. In eastern Africa, serious food supply difficulties are reported in traditional food deficit areas in the Sudan and the food supply situation has deteriorated in Burundi. In southern Africa, despite a significant recovery in this year’s coarse grains harvest, several countries continue to require substantial food assistance, particularly Angola, Lesotho and Mozambique. In western Africa, agriculture continues to be hampered by civil strife in Liberia, necessitating continued food assistance for the country. In Asia, domestic food production remains constrained in Afghanistan due to the effects of civil unrest. Much of the population, displaced by insecurity, together with destitutes and returnees still require international assistance in the months ahead. Floods in Korea, D.P.R. for the second consecutive year have worsened the food problem. In Sri Lanka, drought significantly reduced production of rice in 1995/96, which may result in price increases and supply difficulties, between now and harvest of the main rice crop early next year. In Mongolia, spring fires earlier in the year substantially damaged agriculture and are likely to make an already tight food supply situation worse. In Iraq, the food and nutritional situation remains difficult. In Europe, refugees and war-affected people still require emergency food assistance in Bosnia-Herzegovina. In Armenia, the prospects for the 1996 cereal harvest are unfavourable and international assistance will be needed if cereal import requirements are to be met. The food supply situation remains difficult also in Azerbaijan, Georgia and Tajikistan where international assistance will continue to be needed to help these countries meet their cereal import requirements.

As indicated above, FAO now forecasts world cereal production in 1996 at 1 821 million tons (including milled rice), slightly down from the previous forecast in June, but still 5.2 percent up from the revised estimate of output in 1995. Latest indications confirm earlier expectations for significantly larger global wheat and coarse grain crops, while little change from 1995 is forecast for rice. However, although for some crops throughout the globe 1996 cereal harvests are completed and production estimates are more firm, the major wheat crops in the southern hemisphere, the major coarse grain crops in the northern hemisphere, and the main paddy crop in Asia are still to be gathered. Thus, this forecast could still be subject to revisions should significant changes occur in weather patterns in the coming months.

The latest FAO forecast for world 1996 wheat production is 571.5 million tons, virtually unchanged from the previous forecast, and some 4.8 percent up from the revised estimate of production in 1995. Although downward revisions have been made to the estimates of wheat output in several countries in Asia and Europe, this has been offset by increased forecasts for the good spring wheat crop being harvested in North America, and for the main southern hemisphere crops, which are reported to be developing under generally very favourable conditions. For coarse grains, the FAO forecast has been reduced by 8 million tons since the previous report, but at 875 million tons, would still be 7.6 percent up from the reduced output in 1995. The latest downward revision mainly reflects a lower official estimate for coarse grains output in the United States and a reduction of the forecast for output in the CIS. Rice production in 1996 is now forecast by FAO at 375 million tons in milled terms (paddy: 558 million tons), virtually unchanged from earlier tentative forecasts and marginally higher than last year’s good crop. Since early June, the monsoon rains have moved on course covering most of Asia, favouring planting and development of the main rice crop. However, severe typhoon rains hit some areas in August, particularly those bordering the South China Sea, and may have adversely affected crop prospects there. The outcome of the 1996 global rice crop still depends heavily on weather conditions in the coming months.

FAO’s forecast of world trade in cereals in 1996/97 is 186 million tons, 15 million tons below the estimated volume of imports in 1995/96. The bulk of this sharp contraction in world trade is anticipated in wheat and coarse grains but preliminary indications also point to a slight reduction in rice trade in 1997. The forecasts of world imports of wheat and wheat flour (in grain equivalent) in 1996/97 has been revised to 85 million tons. This would be 6 million tons below the revised estimate for imports in 1995/96, and the smallest volume in more than a decade, mainly reflecting larger crops expected in many importing countries as a result of increased plantings and favourable weather. Global trade in coarse grains in 1996/97 is put at 82 million tons, some 8 million tons down from the revised estimate of the volume traded in the previous year with reductions both in developed and developing countries. With regard to rice, FAO forecasts world trade in 1997 to decline marginally from 1996’s level, now put at 18.9 million tons. However, this forecast is still highly tentative as the bulk of the 1996 crop has yet to be harvested.

The current forecast for global cereal utilization in 1996/97 is 1 805 million tons, an increase of 27 million tons or 1.5 percent from last year, although still somewhat below trend. Much of the forecast increase is expected among the developing countries which, in aggregate, could raise their cereal utilization, mostly for food, by 18 million tons or 1.7 percent. The largest gains are likely in Asia and Africa, especially in response to improved crop output in 1996 in a number of countries in these regions. In developed countries, feed use is expected to rise by almost 7 million tons mostly reflecting an expected recovery in livestock feeding in the United States where it had fallen sharply in 1995/96 largely due to high coarse grain prices.

International wheat prices have fallen sharply since the last report in June. Indications of a larger increase in the U.S. spring wheat output, and favourable prospects for other later harvested northern hemisphere crops, and the major southern hemisphere crops, has eased pressure on the market considerably since late July. By late August, the nominal price of U.S. wheat No.2 (fob) had dropped by about U.S.$ 50 per ton from the price three months earlier to U.S.$ 192 per ton, close to the corresponding price a year earlier. Maize prices remained firm in June and rose to a new peak on 11 July when the price of U.S. No.2 maize reached

U.S.$ 221 per ton. However, quotations weakened considerably during the second half of August mainly due to a slow-down in U.S. sales to several major buyers in Asia. By late August, the price of U.S. No.2 maize fell back to U.S.$ 166 per ton, though it was still some U.S.$ 36 per ton above prices a year ago. After rising in June and July, international rice prices generally weakened in August. The market responded to news that Japan may not fulfill its commitment to import rice as soon as expected, and some upward pressure from concern over floods in China was short lived. The FAO Export Price Index for Rice (1982-84=100) averaged 135 points in August, 4 points lower than the previous month. Prices of lower quality rice fell the most with virtually all the major exporters reducing their prices for broken rice substantially.

The recent years’ steady erosion of global cereal carryovers is expected to be halted in 1996/97, and a modest recovery in stocks is forecast. FAO now forecasts global end-of-season cereal stocks for crop years closing in 1997 at 277 million tons, 11 million tons or 4.1 percent up from their opening levels. However, the ratio of end-of-season carryovers in 1996/97 to trend utilization in 1997/98, at about 15 percent, would still remain well below the 17-18 percent range the FAO Secretariat considers the minimum necessary to safeguard world food security. Furthermore stocks in developing countries are forecast to fall to the lowest level in seven years. The bulk of the recovery in global cereal stocks in 1996/97 is expected in coarse grains in major exporting countries, mainly as a result of a recovery in the maize crop in the United States. Wheat stocks are also expected to increase, but remain at a reduced level, while global rice stocks are tentatively expected to decline for the fourth consecutive year.

As mentioned above, even if the forecast modest increase in global cereal reserves materializes in 1996/97, the stock to utilization ratio would remain below safe levels and the world food security situation would remain delicate for another year. With many harvests now underway in main producing areas the probability of major further deterioration in the outlook for the 1996 crops is diminishing. Nevertheless, some important exporter’s crops of wheat and coarse grains, and the bulk of the world’s rice crop have still to be gathered in the coming months. In the event of adverse weather developments causing even a relatively small reduction in crop estimates or if there were a sudden surge in import demand, because of the tight stock situation, international market prices could rebound and alter the outlook for global food security. Even assuming no change from the situation as currently forecast, replenishment of cereal stocks to a level which would ensure world food security and reduce market volatility will have to wait for at least another year and will require a further sizeable increase in production in 1997. At this time of year, attention is already turning to planting of the main winter crops in the northern hemisphere for harvest in 1997. Thus, the situation, not only for the final outcome of the 1996 harvests, but also now for 1997 crop prospects calls for close monitoring in the coming months.

CURRENT PRODUCTION AND CROP PROSPECTS
POSITION BY REGION

• ASIA
• AFRICA
• CENTRAL AMERICA AND THE CARIBBEAN
• SOUTH AMERICA
• NORTH AMERICA
• EUROPE
• COMMONWEALTH OF INDEPENDENT STATES1/
• OCEANIA

ASIA

Harvesting of the 1996 wheat crop is complete in most of the region’s major producing countries. The estimate of aggregate output has been revised down by about 5 million tons, since the previous report in June, to 227.4 million tons, still marginally higher than last year’s above average crop. In India, output is now estimated at 64 million tons compared to over 66 million tons projected before harvest.

WORLD CEREAL PRODUCTION - FORECAST FOR 1996

The revision is attributed to adverse weather in the final stages of crop maturity, which affected yields. In China, the recently harvested winter wheat crop is considered to be good and an above-average crop, slightly larger than in 1995 is in prospect. In Pakistan, some 17 million tons of wheat was harvested, well above average though somewhat lower than the target of 17.57 million tons. The target for 1996/97 is expected to be around 18 million tons. Production was above average in the Islamic Republic of Iran and Bangladesh.

The overall outlook for the 1996 coarse grain crops in the region remains favourable, though the final outcome will depend heavily on weather conditions in the next few months. The early FAO forecast puts aggregate output at around 204 million tons, which would be above average though slightly below the record crop in 1995. In China, despite extensive floods in the south and southeast in late July/early August, which may have affected the rice crop somewhat, coarse grains, mainly in the north/northeast were not affected, and a good coarse grain harvest similar to 1995’s is expected. Crop conditions are also expected to be satisfactory in India and Pakistan, where the progression of the monsoon so far this year has been normal.

Reflecting short supplies of agricultural inputs and insecurity, production of wheat was again lower than normal in Afghanistan. In Iraq, damage from pests and shortages of agricultural inputs resulted in a wheat crop lower than both last year and normal. Although still below-average, production recovered in Turkey while decreased slightly in Syria. In Saudi Arabia, reflecting Government measures to reduce domestic output, production is estimated to be less than both last year and average.

The latest forecast for the region's output of paddy in 1996 is 510 million tons, about the same as the previous forecast and 4.6 million tons higher than last year. In Bangladesh, torrential rains in July have damaged some of the rice crops, but compared to the previous two years the overall outlook for the Aman rice crop remains favourable. For 1996, Bangladesh plans to produce 9.8 million tons (milled equivalent) of Aman rice, compared to the 8.8 million tons harvested in 1995. In China, widespread floods in July and early August in the southern provinces have threatened the rice crops in the ground. As in previous years, an accurate assessment of flood damage, and of its impact on the total output of the country, is virtually impossible at this time of the year as China grows three main crops. In recent years, losses incurred early in the season have been more than offset by larger plantings of intermediate and late rice. Moreover, 8.3 million hectares of early rice were cultivated in 1996, one percent more than in the previous year. Recent reports from some of the provinces that have reported flood damage have indicated that a good early rice harvest was obtained.

Torrential rains brought about by typhoons have also hit the Republic of Korea. Fifteen thousand hectares of rice lands have been inundated, but no major losses in the rice crop have been reported. For 1996, a target output of 6.6 million tons, slightly higher than last year, has been set. In the Democratic Republic of Korea, however, severe floods have put an end to any expectations of a major recovery in rice production from the extremely poor harvest reaped last year. In the Philippines, typhoons have hit some parts of Luzon and Mindanao rendering some damage to the rice crop. In the northern provinces of Viet Nam, heavy typhoon rains have also been reported in the recent week, but their impact on the crops cannot yet be assessed.

By contrast, in many parts of Asia good Monsoon rains have aided the development of the main season paddy crop. In Myanmar, Thailand and India, the overall outlook of the wet season paddy crop is generally good. In Pakistan, however, floods in late August have affected somewhat the hitherto favourable outlook of the rice crop in the ground. In Japan, the return of normal weather following an early cold spell has helped to support more favourable crop prospects. Nevertheless, a smaller out-turn is expected for the whole of 1996, mainly because of an increase in the Paddy Land Diversion Programme. Moreover, in August typhoons have adversely affected some of the rice grown in Kyushu.

Closer to equator, the 1996 main paddy season is almost over and the second crop is about to be harvested. In Sri Lanka, extensive drought is likely to reduce its Yala output by about 40 percent from the previous year's level, hence bringing total production of paddy this year drastically down by nearly 34 percent to 1.9 million tons. At this level, output of rice in the country will be at its lowest level in the decade. In Malaysia, the off-season rice crop is estimated at about 826 000 tons, only slightly lower than in the previous year. With this output, the country's total production of paddy rice would be around 2.1 million tons, marginally higher than in 1995. In Indonesia, the second season paddy crop in Central Java has been slightly affected by drought since June, with several paddy growing areas reporting a reduction in water supplies available from reservoirs. Output from its main season production, which has already been gathered, however, was larger than in the previous year.

AFRICA

NORTHERN AFRICA: Output of wheat in 1996 is estimated at 16.4 million tons, 82 percent up from last year's poor outturn of 9 million tons mainly due to increased plantings and generally favourable weather. All countries of the sub-region harvested above-normal or record crops. Mainly reflecting a sharp increase in the area planted and improvement in harvest techniques, production in Algeria is estimated to have nearly doubled to 2.8 million tons, 0.93 million tons more than the previous record in 1991. Despite a small decline in the area sown, output in Egypt is estimated at 5.8 million tons, marginally higher than last year's record crop. In Morocco production increased by more than 5 times to the sharply above-normal level of 5.8 million tons. After two consecutive years of markedly reduced harvests, production in Tunisia reached a record level of 1.8 million tons. Aggregate output of coarse grains in the sub-region in 1996 is estimated at 13.5 million tons, an increase of 60 percent compared to the below-normal 1995 crop.

In Egypt, harvesting of the rice crop begins around mid-September. The overall conditions are good and an above average output of about 4.5 million tons is expected. Last year, the country harvested a record 4.8 million tons of rice because of a sharp improvement in yields.

WESTERN AFRICA: Growing conditions are generally favourable in Sahelian countries. Following adequate rains in May and June, below normal rains in early and mid-July have stressed coarse grains or necessitated replantings in several areas. However, rains increased significantly in late July and August benefiting recently planted crops, allowing stressed crops to recover and soil moisture reserves to be replenished. If rains remain adequate throughout September, average crops are anticipated on most countries. Prospects are notably promising in Chad following abundant and widespread precipitation in August. Desert Locust infestations are reported in Mauritania and some areas of Mali and Niger but should not affect significantly crop outlook. Control operations are underway.

In the coastal countries along the Gulf of Guinea, cumulative rainfall is generally about average. The first maize crop has been harvested in the south while millet and sorghum are growing satisfactorily in the north. Crop prospects are poor in Liberia and Sierra Leone, following several years of civil strife and persistent insecurity. The situation could improve in Sierra Leone as rehabilitation programs are implemented, following the start of a peace process.

The overall outlook for the paddy crop in the sub-region is favourable. Assuming continued normal weather conditions for the remainder of the paddy season, the region's output of paddy in 1996 is expected to be around 6.3 million tons, higher than in the previous two years, but below the levels produced in 1992 and 1993. Harvesting of the rice crop generally starts around September. In Nigeria, a larger output of paddy is expected because of increased plantings, but the severe shortage of fertilizers during the vital growing season is expected to curtail its target to raise paddy output to 3.25 million tons. In Côte d'Ivoire, a good crop is expected although it may be marginally smaller than the exceptional harvest of 1.05 million tons of last year. In Sierra Leone and Liberia, rice production prospects continue to suffer from civil strife.

CENTRAL AFRICA: Abundant and widespread rains over Central Africa allowed a good development of coarse grains. The harvest of the first maize crop is drawing to an end in Cameroon, Central African Republic and Congo while dry conditions prevail in the south and the centre of Zaire.

EASTERN AFRICA: The early outlook for the sub-region’s 1996 wheat crop is favourable. In Sudan, where the crop was harvested earlier in the year, latest estimates indicate an output of 527 000 tons, 18 percent higher than last year and average. In Kenya, a good output is expected following record plantings and adequate rains so far. Prospects for the developing wheat crop are also promising in Ethiopia following abundant rains since the beginning of the season.

Prospects for the 1996 coarse grains are mixed. In Ethiopia, abundant rains in the past months resulted in floods but generally benefited development of the 1996 main “meher” coarse grain crops. These rains also benefited the secondary “belg” crops and a good output has been gathered. In the Sudan, rains from mid-July allowed completion of the 1996 coarse grains planting and brought relief to earlier sowed crops, but more precipitation is still needed in parts. In Kenya, the 1996 main maize crop is anticipated to decline from last year’s good level due to a decrease in plantings in response to low producer prices, increased costs of fertilizers and irregular rains at sowing time. In Eritrea, precipitation in the first decade of August improved the outlook for the 1996 coarse grains crops following below normal precipitation in parts in July. In Somalia, prospects for the 1996 “Gu” crops being harvested are generally favourable, but production will be reduced in parts. In Uganda, following abundant rains during the main season, another above-average coarse grain crop is expected this year. In Tanzania, apart from some localized areas affected by adverse weather, a generally good coarse grain crop is in being harvested. In Rwanda, the output of the 1996 second season coarse grain crop was higher than last year but remained below normal. In Burundi, increased insecurity during the season adversely affected the first season coarse grain crops, estimated to be lower than last year.

SOUTHERN AFRICA: Harvesting of the 1995/96 coarse grain crops is complete in the sub-region. Aggregate production is estimated at about 20 million tons, 88 percent above the poor 1995 crop and 40 percent above average. Following generally favourable rainfall and increased plantings, above-average coarse grain crops have been harvested in most countries including Malawi, South Africa, Zambia and Zimbabwe, the largest producing countries. In Angola and Mozambique, excellent rainfall and favourable growing conditions for crops encouraged large plantings and above-average output for cereals but also pulses and tuber crops such as cassava has been harvested. Only Namibia experienced below normal rainfall, seriously affecting pastures and livestock but resulting in only localized damage to crops. An overall maize surplus in the sub-region of over 2 million tons is anticipated, mainly from South Africa, Zimbabwe and Zambia.

Prospects are excellent for the recently-planted 1996 wheat crop. With abundant irrigation water in most of the major dams, the sub-region’s production is forecast to exceed 2.7 million tons, some 28 percent above last year’s output. In South Africa, a 10 percent increase is expected over last year’s good crop. A strong recovery from last year’s relatively poor crop is anticipated in Lesotho, Zambia and particularly Zimbabwe where a trebling of output is in prospect. However, recent invasions of red locusts in the north-eastern parts of the country have raised fears of possible damage to the crop.

The 1996 paddy season is virtually over in the sub-region. In Madagascar, following increased plantings and favourable rainfall, production is estimated at 2.5 million tons, marginally above last year’s relatively good crop. In Mozambique, where output has been steadily expanding since 1992, a harvest of 140 000 tons is estimated for this year, which is 24 percent above the 1995 level and above-average. A slight decrease in production is expected in the other countries.

CENTRAL AMERICA AND THE CARIBBEAN

Light to moderate rains in the first half of August, in the main wheat growing irrigated areas of the north-west and north-central Mexico, provided much needed moisture to replenish soil reserves and water reservoirs for planting of the 1996/97 wheat crop due to start from October. The rains particularly benefited the states of Sonora, Chihuahua, Durango and Sinaloa, which account for most of the wheat production in the sub-region.

Planting of the 1996 main season coarse grain crops has been virtually completed in the sub-region. In Mexico, abundant rains in August in the southern plateau and Yucatan peninsula favoured the developing maize crop, while light rain brought some relief to the drought-affected northeastern states of Nuevo Leon, Cohauila and Tamaulipas, where the bulk of the sorghum output is grown. However, more rain is needed to ensure a recovery from last year’s poor sorghum crop. Early forecasts put maize production at about 17 million tons, while between 5 and 5.5 million tons of sorghum are anticipated, compared to 4.1 million tons in 1995. Elsewhere in the sub-region, particularly in Costa Rica, Nicaragua and El Salvador, heavy storm rains and floodings in July have affected food and cash crops. Nevertheless, even allowing for some damage, an above-average maize output is anticipated. In the Caribbean, in the Dominican Republic, normal to abundant rains in July benefited the rainfed crops which had been affected by a dry spell in the previous 2 months. In Cuba and Haiti, despite normal rains, slightly below-average maize outputs are anticipated.

SOUTH AMERICA

Planting of the 1996/97 wheat crop has been virtually completed in the southern areas of the region. In Argentina, weather conditions continue to favour the developing crop. The area sown is provisionally estimated close to 7 million hectares, which compares to 5 million hectares in 1995/96. Yields are expected to improve considerably due to increased use of fertilizers and improved access to farm equipment. Early forecasts point to a record output in excess of 14 million tons. In Brazil, adequate rains in August have benefited the developing crops in the main producing states of Parana and Rio Grande do Sul, where the area planted has substantially increased. Harvesting is about to start and output is provisionally forecast at about 3 million tons, which compares to 1.5 million tons in 1995 and to a 2.3 million tons average in the last 5 years. In Chile, a significantly below-normal output is anticipated largely due to a decrease in the area planted because of dry weather at planting. In Uruguay, by contrast, a bumper crop is anticipated principally as a result of larger plantings coupled with favourable weather conditions so far. In the Andean countries, in Bolivia, fieldwork continues on the second season (winter) wheat crop presently in the ground. Below-normal rains in June should not affect the crop as sufficient soil moisture reserves were reported at planting. In Peru, harvesting of the 1996 wheat crop continues under favourable conditions. In Ecuador, harvesting of the main season crop continues in the highlands, where most of the wheat crop is grown. An average output is provisionally forecast. In Colombia, harvesting of the 1996 wheat crop has recently started and an average output is anticipated.

Land is being prepared in the southern areas of the sub-region for planting of the 1997 coarse grain crops mostly from October. In Argentina, latest official sources indicate intended maize plantings of between 3.4 to 3.8 million hectares, compared to 2.6 million hectares planted last year. A significant increase in the area planted is also anticipated for sorghum. In Brazil, sowing has already started in some areas under favourable conditions and the area planted to maize is expected to be close to the 1995 record level assuming good weather conditions persist. In Chile, planting of the maize crop is about to start and a recovery is expected from last year’s drought affected crop. In the Andean countries, in Bolivia, land is being prepared for planting of the 1996 barley winter crop while that of sorghum is in the ground. Average to above-average plantings respectively are anticipated. In Ecuador, harvesting of the 1996 white maize main crop has been completed while planting of the second season yellow maize crop is underway. Aggregate maize output is expected to be above average. In Peru, harvesting of the 1996 maize crop continues under favourable conditions. Output collected in the first 6 months of the year is estimated at about 461 000 tons compared to last year’s 404 000 tons during the same period. In Colombia, harvesting of the 1996 first season maize and sorghum crops has started and outputs are provisionally forecast to be about average. In Venezuela, planting of the 1996 maize crop continues under normal weather conditions and above-average plantings are intended provided good weather persists.

In South America, most countries have completed the harvesting of their main season rice crop. The region's output of paddy in 1996 is estimated at about 18.6 million tons, slightly lower than last year. Brazil, the largest producer and consumer in the region, output was 10.2 million tons, one million tons less than last year. In Argentina, however, despite earlier fears of drought effects, a larger 1996 crop has been gathered. Paddy output in Guyana is likely to reach 560 000 tons, twice the quantity produced a decade ago. Since the liberalization of its economy and reduced restrictions to its rice export trade, the country's output of paddy has expanded as have its exports of rice. In Uruguay, a record 900 000 tons of paddy have been produced.

NORTH AMERICA

In the United States, the latest official estimate (12 August) put the 1996 aggregate wheat harvest at 61.2 million tons, up nearly 3 percent from last year’s harvest. Although output of winter wheat fell by some 1.5 million tons to 40.7 million tons, this is expected to be more than offset by a significant increase in the spring wheat crop, now forecast to increase by about 3 million tons from 1995 to 20.5 million tons. By late August, across the major spring wheat producing states, it was reported that 50 percent of the crop was already harvested and above-average yields had been recorded. The bulk of the remaining crop is reported to remain mostly in good to fair condition.

In Canada, prospects are favourable for the 1996 wheat crop. Official estimates indicate an increase of 15 percent in planted area compared to a year ago. In addition, favourable weather conditions have more than compensated for the late planting of some crops and generally above-average yields are expected. Some potentially damaging disease outbreaks have been reported in some crops in August, but the full extent of damage, if any, is not yet known. Based on the latest planting estimates, and crop conditions in late August, aggregate Canadian wheat production in 1996 is forecast at 29 million tons, 14 percent above the 1995 crop and well above the 10-year average.

The outlook for the United States coarse grain crop has deteriorated somewhat since the last report but output is still set to increase greatly from 1995’s reduced crop. The USDA’s first survey-based forecast (12 August) put aggregate coarse grain production at 250.6 million tons, of which maize accounts for 220.9 million tons, 5 percent down from earlier projections but still 18 percent up from last year. Maize plantings are estimated to have increased to some 32 million hectares, the largest area since 1985, and yields are tentatively forecast at 7.45 tons per hectare, up from 7.12 tons per hectare in the previous year. Although July weather was generally very favourable for pollination, many of the Corn Belt crops were late planted and may not have been sufficiently developed to benefit fully from these conditions. The final outcome still depends largely on the weather through October.

In Canada, the areas planted to the major coarse grains barley and oats, are estimated to have increased by 15 percent and 33 percent respectively compared to a year ago. As for wheat, favourable weather conditions have benefited crop development and above-average yields are in prospect. The country’s aggregate coarse grains production is now forecast at 28.5 million tons, 17 percent up from 1995.

In the United States, harvesting of the paddy crop is under way. Following the USDA's first survey of the crop, the forecast for its 1996 paddy output has been slightly reduced to just under 7.7 million tons, or two percent less than last year. While crop performance has been good because of favourable weather, the area cultivated under rice has fallen, except in California which produces mostly medium grain rice. In 1996, the total area under medium grain rice rose, but the area under long grain rice fell sharply with the bulk of the reduction located in Arkansas.

EUROPE

Prospects for the bulk of the 1996 wheat and coarse grains in the region remain generally satisfactory. Despite localized weather disruptions to harvests in August, most of the cereal crops in central and southern parts of Europe have now been gathered and latest indications still point to an increase in aggregate wheat and coarse grain production. Larger crops throughout the EC have more than offset reduced harvests in some eastern countries.

In the EC, predominantly dry weather over northern countries throughout August favoured winter grain harvesting but restricted yield potential of developing summer crops. By contrast, in southern parts, showery conditions have somewhat hampered winter grain harvesting but benefited developing summer grains. Reflecting this year’s generally favourable growing conditions, and increased plantings throughout the Community, following the reduction of set-aside, the EC’s aggregate cereal production is now expected to increase in 1996 to some 193 million tons. This latest forecast is somewhat above earlier expectations and 7 percent above revised estimates of last year’s crop. Larger wheat barley and maize crops are expected this year in all the major producers, with the sharpest increase in Spain, where output is set to recover significantly from drought-reduced crops in previous years. FAO’s latest forecasts put aggregate wheat production in the Community at 92 million tons (1995: 87.6 million tons) while coarse grain output is forecast at nearly 99 million tons (1995: 90.4 million tons).

In eastern parts of the region, reduced cereal crops are in prospect in most countries reflecting the effect of a harsh and prolonged winter, and continuing economic problems within the agricultural sector of some countries. In Poland, contrary to other eastern countries, conditions for crop development have been more favourable and 1996 cereal production, at 25.9 million tons, would be virtually unchanged from last year’s. In Hungary, wheat output is now officially forecast at a below-average 3.8 to 3.9 million tons, against of 4.6 million tons in 1995. Latest indications for the barley crop also point to a smaller output of about 1 million tons. By contrast, prospects for the 1996 maize crop are favourable and the crop is tentatively forecast at about 5 million tons, compared to 4.6 million tons in 1995. In Romania, where the bulk of the winter crops have been gathered, output of wheat is officially estimated at 3.4 million tons, sharply reduced from last year’s bumper 7.7 million ton crop. With regard to maize, the country’s major summer crop, prospects are still favourable for a good harvest and output of some 9 million tons is currently expected. In Bulgaria, the 1996 cereal output is sharply reduced at an estimated 4 million tons, down 2.5 million tons from the previous year and about 40 percent below average. Of the total output, wheat is estimated to account for just about 2 million tons compared to a normal harvest of about 3.5 million tons and the quality of crops is reported to be poorer than normal. In the Czech Republic, the 1996 cereal crop is expected to be little changed from last year at about 6.5 million tons. A slightly reduced wheat crop is expected to be offset by an increase in barley production. Also in the Slovak Republic, cereal output is seen little changed from 1995 at some 3.3 million tons. In Albania, cereal production continues to remain well below potential due mainly to economic factors disrupting the agricultural sector. In the Baltics, early indications point to a sharp upturn in 1996 wheat and coarse grain production but the harvest is somewhat later than usual and the final outcome will depend crucially on good weather until its completion. In Estonia, winter and spring grain plantings increased and output could recover to about 600 000 tons, nevertheless remaining below average. In Latvia, grain output could rise to 900 000 tons provided weather conditions remain favourable until the completion of the late harvest. In Lithuania also, the grain harvest could be up to 15 percent larger than last year, in response to larger plantings and very little crop damage by winterkill.

The 1996 paddy crop season is well advanced in Europe. Overall conditions are reported to be favourable and harvesting of the crop is about to start in September. Total output of paddy in the EC in 1996 is forecast to increase to 2.4 million tons largely due to a 16 percent rise in area planted to about 425 000 hectares, which would be near the maximum quota area allowed in the Community under the EC’s new rice policy. In Italy, the area sown to paddy is little changed from the previous year. However, there has been a pronounced drop in the area sown to Indica, although plantings of Japonica, especially varieties for parboiling, have risen sharply. In 1996, about 25 850 hectares of Indica rice have been planted compared to 45 502 hectares in the previous year. By contrast, in Spain good rains have boosted rice plantings to about 105 000 hectares, nearly twice that in 1995. Out of this, Indica rice accounts for about 40 000 hectares compared to just 1 100 hectares in 1995.

COMMONWEALTH OF INDEPENDENT STATES1/

In the CIS the 1996 the outlook for the 1996 cereal and pulse harvests is markedly better than last year. The harvest is underway in all countries and average yields are higher than last year in most countries, except drought-affected Ukraine and Moldova. Current indications are that the 1996 output of cereals and pulses could be about 8 million tons larger than last year’s harvest now estimated at about 125 million tons mainly on account of larger crops in the Russian Federation and Kazakhstan. Better harvests than last year are also anticipated in Azerbaijan, Belarus, Georgia, the Kyrgyz Republic, Tajikistan and Uzbekistan. By contrast output in the Ukraine and Moldova is expected to fall sharply as persistent dry conditions since the spring have adversely affected the yield of winter and spring crops. In Armenia, extensive winterkill could also result in a well below normal harvest, while the outcome in Turkmenistan remains uncertain.

Indications are that the aggregate area sown to wheat has increased by about 10 percent, and, coupled with better yields, aggregate production of wheat in the CIS could rise by about 9 million tons to 69 million tons. The coarse grain area has declined further but better overall yields than last year could result in only a marginal decline in aggregate output to 60 million tons. Production of paddy is likely to remain fairly stable at about 1.2 million tons while that of pulses could increase.

OCEANIA

In Australia, the outlook for the 1996 winter wheat and coarse grain crops remains favourable. After an exceptionally good early planting season, the latest official estimate puts the 1996 aggregate winter wheat area at about 11 million hectares, up some 11 percent from the previous year. However, continuing excessive rainfall late in the planting season, made conditions difficult for barley planting and the barley area is estimated to have remained close to the previous year’s level at 3.1 million hectares. Persisting wet conditions are also reported to be stressing young growing crops and hampering fertilizer applications and weed control measures. Based on the planted area estimates, ample soil moisture supplies, and assuming drier warmer weather arrives soon, Australia’s aggregate wheat crop in 1996 is now forecast at 19 million tons, which would be the second biggest crop on record. However, after the difficult start to the season, output of barley is expected to reach only some 5.3 million tons, compared to 5.5 million tons in 1995. The recently harvested summer coarse grain crop, mostly sorghum, recovered significantly in 1996 after 3 years of drought reduced outputs. The 1996 sorghum crop is estimated at 1.6 million tons. About 1.15 million tons of paddy rice have been gathered in 1996, slightly less than earlier anticipated because of abnormally cold weather late in the season which resulted in slightly lower yields.