No. 3/4, 1997 - Rome, March/April 1997

HIGHLIGHTS

Another good cereal crop is in prospect in 1997. If current forecasts materialize, 1997 cereal output would be sufficient to meet the anticipated consumption requirements in 1997/98 and may allow for a further replenishment of cereal reserves.

Nevertheless, food emergencies affect 29 countries worldwide, mostly in Africa. Severe difficulties persist in the Great Lakes region and in the Horn of Africa due to civil strife, large population displacement, and reduced crops. In Asia, the food situation is deteriorating rapidly in the Democratic People's Republic of Korea.

FAO's first forecast puts 1997 cereal production at 1 880 milion tons, close to the 1996 record crop and above trend for the second year in succession. Assuming favourable conditions until harvest, wheat output is forecast at 590 million tons and that for coarse grains at 910 million tons, while the rice crop is tentatively forecast to remain virtually unchanged from the previous year's level at about 380 million tons.

FAO's latest forecast for world trade in cereals in 1996/97 is 189 million tons, 3 million tons up from the previous forecast but still 9 percent below the volume traded in the previous year, and the lowest volume since 1990/91.

Global cereal utilization in 1996/97 is forecast at 1 833 million tons, 41 million tons up from the previous year. The expansion is accounted for by increased food use of cereals in the developing countries and increased feed use in the developed countries.

Total food aid availabilities of cereals in 1996/97 are forecast at 7.5 million tons, unchanged from the previous year, but about half the level of the early 1990's . The low-income food-deficit countries would receive about 5.9 million tons in 1996/97, representing about 10 percent of their forecast cereal import needs compared with 15 percent in 1992/93.

Wheat and coarse grain prices in international markets firmed up in March, but remained well below those at the same time last year. International rice prices fell further in March under pressure from good 1996 crop supplies.

Global cassava production is tentatively forecast to increase in 1997, especially in the major exporting countries, after a slight decline in 1996. Some increase in world cassava trade is also forecast although much could depend on price developments for alternative feed components in the major importing countries.