Food Outlook 10/96

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REVIEW OF 1995/96

The sharp rise in international grain prices in 1995/96 contributed to a downturn in global cereal utilization for the first time since 1988/89 to 1791 million tons, although the contraction of 8 million tons was small. A considerable reduction in feed use in the developed countries more than offset the continued growth in demand for food and feed use among the developing countries. While the utilization of coarse grains, mostly used for feed in the developed countries, declined substantially,

wheat and rice consumption showed small increases over the previous year.

The current estimate of the 1995/96 food consumption of cereals is 920 million tons, accounting for one-half of total world utilization, an increase of 1.9 percent, or 17 million tons from the previous year. While most of the increase in food consumption was among developing countries, food use in the developed countries is also estimated to

have risen modestly compared to the previous season. Globally, per caput food consumption in 1995/96 remained virtually unchanged at about 161 kilos per year.


1994/95 1995/96 1996/97 f'cast

(. . . . . . million tons . . . . . .)
Total utilization

World 1 799 1 791 1 827
Developing countries 1 047 1 079 1 097
Developed countries 752 713 729
Food consumption 1/

World 903 920 933
Developing countries 740 754 767
Developed countries 164 166 167
Feed use

World 646 614 633
Developing countries 199 207 213
Developed countries 447 408 420
Other uses 2/

World 249 258 260
Developing countries 108 118 117
Developed countries 141 139 142

Note: Total computed from unrounded data.
1/ For direct human consumption.
2/ Other uses include seed, industrial uses and post harvest losses.

Aggregate food consumption of cereals in the developing countries is estimated to have reached 754 million tons in 1995/96, almost 2 percent above the previous year. This rise is matched to that of population growth, and as result, average per caput food consumption of cereals in these countries was unchanged at 171 kilos. Likewise, at 174 kilos, the Low-Income Food Deficit Countries as a group are also estimated to have maintained their annual per caput food consumption of cereals. However, it declined in a numbers of these countries, particularly in Africa, while bumper crops in many parts of Asia in 1995 contributed to a slight increase in this region.


1994/95 1995/96 1996/97 f'cast

( . . . . . millions tons . . . . . )

Developing countries 312 322 328
Developed countries 241 241 247
World 553 563 575
Food 393 399 403
Feed 94 92 101
Other uses 1/ 67 72 71

Developing countries 385 399 407
Developed countries 493 454 464
World 878 853 871
Food 186 190 193
Feed 543 512 524
Other uses 1/ 149 150 154
RICE (milled)

Developing countries 350 358 362
Developed countries 18 17 18
World 368 376 380
Food 325 330 337
Feed 9 10 9
Other uses 1/ 34 36 35

Note: Total computed from unrounded data.
1/ Other uses include seed, industrial uses and post harvest losses.

Total cereal food consumption in the developed countries is estimated to have increased slightly to 166 million tons in 1995/96, which was sufficient to maintain per caput consumption at 129 kilos. Small increases in food use are estimated for Europe and North America while cereal food consumption continued to decline in the Commonwealth of Independent States (CIS).

Global feed use of cereals in 1995/96 is estimated to have dropped by 32 million tons, or 5 percent, to 614 million tons from the previous year. High international prices have been largely responsible for a sharp reduction in the feed demand for cereal in the developed countries. In the United States, the feed use of grains fell by 18 percent in 1995/96, despite a larger number of livestock, as producers found alternative feed, such as longer grazing periods, to substitute for relatively more expensive grains. In the CIS, the continuing structural change in the livestock sector, rather than high cereal prices, was the main reason for the further decline in feed use of cereals. By comparison, grain feeding increased slightly among the EC-12 countries compared to 1994/95, partly as a result of reduced availabilities of cassava, which is used as a feed substitute for grains, as well as restrictions on grain exports which helped to stabilize domestic grain prices.


1994/95 1995/96 1996/97 f'cast

(. . . . . kg. per head . . . . .)
Developing countries 170.3 170.5 170.5
Developed countries 128.9 129.1 129.6

Low-income 161.0 161.2 161.4
food-deficit countries 173.8 174.0 173.9
(exclud. China and India) (150.3) (151.4) (151.5)
Wheat 69.9 70.0 69.8
Coarse grains 33.2 33.4 33.4
Rice (milled) 57.8 57.8 58.3


Feed use of cereals in the developing countries, which accounts for about one fifth of their total cereal use, is estimated to have risen by about 4 percent to 207 million tons in 1995/96. Most of the expansion occurred in Asia, primarily China, where a bumper maize crop combined with larger imports and a ban on maize exports contributed to meeting the strong demand from the expanding livestock sector.

As regards other uses of cereals (mainly seed, industrial uses and losses) they are estimated to have risen by 9 million tons to 258 million tons in 1995/96. Post-harvest losses are assumed to be largely responsible for this development, especially in Asia where several countries produced near-record crops.


Preliminary indications for 1996/97 are for world cereal utilization to recover by 2 percent, or 36 million tons, to 1827 million tons, still leaving total utilization slightly below the long-term trend. While this first forecast points to only a modest expansion in food consumption of cereals, feed use is expected to recover significantly, because of lower grain prices compared to last season. Continued strong demand for livestock products in the fast growing economies of Asia and Latin America and the Caribbean is also expected to contribute to expanding global feed use, in particular of coarse grains.

Globally, food consumption of cereals is forecast to increase by 1.4 percent, or 13 million tons, to reach a total of 933 million tons in 1996/97, roughly on trend, and world per caput food consumption is anticipated to remain unchanged at 161 kilos. The bulk of the increase in total cereal food consumption is expected among developing countries mainly due to good harvests in many parts of Asia and a recovery of output in Africa. In the developed countries food use of cereals is forecast to rise only slightly.

By far the most significant change in global cereal utilization in 1996/97 is expected for feed use which is forecast to rise by 3.1 percent, or 19 million tons, to 633 million tons, about the average level for the last five years but slightly below trend. A return to more normal levels of feeding in the developed countries, with some exceptions, is likely to be largely responsible for the recovery, mostly reflecting lower international grain prices. Feed use among these countries is forecast to rise by 12 million tons from the previous year. In the United States, feed use of grains is expected to increase by about 12 percent in 1996/97 to 156 million tons, about the average level of the first half of the 1990s, but below the record of 1994/95. The feeding of grains in the EC could also expand this year following a substantial increase in production this season. The effect of the BSE crisis (see Box on page 30) on the demand for grains in the EC in 1996/97 is uncertain, but there is a potential impact. As meat production shifts away from beef to other types of meat, such as pork and poultry, the use of grains could increase as feed rations for these animals use a higher percentage of grains than those for cattle. Offsetting this effect, however, would be the fact that pork and poultry are more efficient converters of grain to meat, thus requiring less grain per unit of output. In contrast to the expansion expected in the EC and the United States, feed use is forecast to decline in a number of countries in the CIS and eastern Europe due to continuing structural changes, especially in the CIS, and to reduced animal numbers and shortages of feed supplies following heavy slaughter last season.

Cereal feed use in the developing countries is anticipated to continue its upward trend in 1996/97, rising by 3 percent, or 6 million tons, to 213 million tons. While more feeding, especially of coarse grains, is expected in countries with fast growing economies in the Far East, the aggregate increase for Asia is likely to be lower this year due to a possible drop in feed use in Saudi Arabia where much improved pasture conditions are expected to reduce the feeding of barley to camels and sheep. Greater feed use is also forecast for North Africa and South America mainly due to a combination of lower prices and larger domestic supplies.

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