FAO/GIEWS - Food Outlook July/August/September 1997

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CEREALS



SUPPLY/DEMAND ROUNDUP

The world cereal supply and demand balance will remain close in 1997/98. Although latest indications for the 1997 cereal crops continue to point to another good harvest at the global level, prospects for some of the remaining 1997 crops, particularly for coarse grains in the United States and China, are not as good as earlier anticipated. FAO's latest forecast for the 1997 world cereal crop is 1 869 million tons (including rice in milled terms), less than 1 percent below last year's record and still above trend, but 18 million tons below the previous FAO forecast. At this level, cereal output would be close to the expected consumption requirements in 1997/98, and stocks would remain virtually unchanged from the previous year's low level. Thus, the global stock-to-utilization ratio in 1997/98, at about 15 percent, would remain well below the 17-18 percent range the FAO Secretariat considers the minimum necessary to safeguard world food security for another year. With many of the 1997 cereal harvests already completed, the probability of major further deterioration in the outlook for the 1997 crops is diminishing. Nevertheless, some important exporter's crops of wheat and coarse grains, and the bulk of the world's rice crop have yet to be gathered, and could still be affected by adverse weather, including that caused by the El Niño 1/.
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1/[ FAO’s Global Information and Early Warning System is closely monitoring the effects of the El Niño. Two FAO papers, one on the development of the phenomenon and one giving an analysis of the possible impact in Latin America, are available on request or can be seen on the FAO Web page on Internet.]

WORLD CEREAL PRODUCTION, SUPPLIES,

TRADE AND STOCKS
1995/96  1996/97 
estim. 
1997/98 
f'cast
(. . . . . . million tons . . . . . .) 
Production 1 1 728  1 877  1 869
Wheat  547  590  600
Coarse grains  810  906  888
Rice (milled)  371  381  381
Supply 2 2 046  2 134  2 151
Utilization  1 796  1 847  1 867
Trade 3 205  196  201
Ending Stocks 4 258  282  280
SOURCE: FAO
1/ Data refer to calendar year of the first year shown. Rice in milled equivalent.
2/ Production, plus opening stocks.
3/ July/June basis for wheat and coarse grains and calendar year for rice.
4/ Does not equal the difference between supply and utilization due to differences in individual country trade years.
 
 

World Cereal ProductionWith the margin of security provided by reserve stocks at a relatively low level, even a small reduction in crop estimates could lead to sharp price rises with serious consequences for the food security of many Low-Income Food-Deficit countries, particularly those which depend on imports to meet a large part of their food requirements. FAOcurrently estimates that 29 of these countries are already facing food emergencies of varying intensity (see box below). Even assuming no change in the 1997/98 outlook from the current forecast, replenishment of cereal stocks to a level which would ensure world food security will have to wait at least another year, and will require a sizable increase in production in 1998. At this time of the year, attention is already turning to planting of the main winter crops in the northern hemisphere for harvest in 1998. The current strong El Niño weather phenomenon, due to peak from December to March, is already giving rise to concern in some important producing areas where related weather extremes could have a serious impact on the 1998 harvests. Thus the situation calls for close monitoring in the months ahead, not only for the final outcome of the 1997 crops, but also for 1998 crop prospects.

As indicated above, FAO's latest forecast for world cereal production in 1997 is 1 869 million tons, (including rice in milled terms), close to the crop in the previous year. Following favourable results from the bulk of the major wheat harvests in the northern hemisphere, the forecast for world wheat production has been revised upward to 600 million tons, 1.7 percent above last year's good crop and above trend for the second year in succession. The latest revision mainly reflects larger estimates for several countries in Asia, the United States, and the CIS, which more than offset downward revisions for Canada, the major producers in Africa, and Australia. For coarse grains, FAO's forecast for global output in 1997 has been reduced substantially since the last report in June, to 888 million tons, 2 percent below the above-trend crop in 1996. Production is seen to increase somewhat in central and south America, Europe and the CIS, but smaller crops are expected in Asia, Africa, North America and Oceania. FAO's latest forecast for the 1997 world paddy crop has been revised upward, by 4 million tons, to 567 million tons (381 million tons in milled terms), virtually unchanged from the record crop last year.

Although for some crops throughout the globe 1997 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, the above forecasts could still be subject to revisions should significant changes occur in weather patterns in the coming months. As mentioned above, the current strong El Niño phenomenon which has been observed since March this year, gives cause for concern in some areas of the globe, particularly in the southern hemisphere, where severe weather anomalies may result. However, the most intense impact of El Niño is expected from December to March, and therefore it is the 1998 cereal crops, which are yet to be planted, that are most at risk.

FAO's forecast of world imports of cereals in 1997/98 (July/June) has been raised by 4 million tons, to around 201 million tons, since June. This would be about 5 million tons, or 2.5 percent, above the previous year’s reduced volume but still below 1995/96 when world imports rose to 205 million tons despite record prices. The latest revision reflects increased forecasts for wheat and coarse grains while the forecast for 1998 rice trade remains unchanged. Global wheat imports in 1997/98 are now put at 94 million tons, 1.8 million tons above the revised estimate of the 1996/97 volume, mostly reflecting larger imports by the developing countries, especially in Africa, which would more than offset the decline in aggregate imports by the developed countries. Global coarse grain imports in 1997/98 (July/June) are forecast at 89 million tons, 2.5 million tons above the previous year’s volume. Increased imports by the developing countries, which are forecast close to the 1995/96 record level, accounts for all of this year’s anticipated expansion. The anticipated increase among these countries would more than offset a forecast reduction in coarse grains imports by the developed countries, for the sixth year in succession. It is too early to make a forecast of global rice trade in the 1998 calendar year, but early indications suggest that rice shipments will increase to 18 million tons.

The current outlook for cereal utilization in 1997/98 is 1 867 million tons, about 1 percent above the long-term trend (1984/85-96/97). The latest revision reflects an upward adjustment in wheat and rice utilization, whereas that for coarse grain is now expected to be below the earlier forecast. Wheat consumption is now put at 591 million tons, almost 2 percent above last year. Most of the increase would reflect larger food consumption while this year’s abundance of low quality wheat could also encourage greater feed utilization, particularly in North America and Europe. The growth in coarse grain utilization is currently forecast to continue into the 1997/98 season, though at a slower pace than in the past few years. Total coarse grain utilization is expected to reach 893 million tons, less than 1 percent up from last year. The continuing strong demand for yellow maize for feed in several countries in Asia would account for most of the anticipated expansion this season. As regards rice, the forecast for consumption in 1997/98 is anticipated to be roughly on trend at 383 million tons as consumption in China, in particular, is expected to continue to expand.

International export prices of wheat rose significantly in the past few weeks, in response to strong demand in several countries, particularly in Asia and North Africa. By the fourth week in August, wheat prices from most origins had gained at least U.S.$ 15 per ton compared to early July, although they remained substantially below the corresponding period last year; U.S. wheat No. 2 (HRW, fob) was quoted at U.S.$ 154 per ton, U.S.$ 38 down from the price a year ago. International maize prices have also strengthened over the past few weeks, in response to somewhat tighter supply prospects. By late August, maize prices were quoted at around U.S.$ 115 per ton, up by at least U.S.$ 10 per ton from a month earlier, but still U.S.$ 75 below the same period last year. With regard to international rice prices, the FAO Export Price Index for rice (1982-84=100) averaged 130 points during June and July, just above the May average but 9 points below the average for the same period a year ago. However, prices eased significantly during August as harvests in the Far East drew nearer and prospects remained favourable. In Thailand, prices fell to their lowest level in 1997. The price for Thai 100B averaged U.S.$ 300 per ton during August, down from an average of U.S.$ 337 per ton in the preceding month.

FAO's latest forecast for cereal stocks for crop years ending in 1998 is 280 million tons, close to the reduced level of the previous year. This latest forecast is some 14 million tons lower than earlier anticipated, mostly as a result of a significant reduction in the expected coarse grain inventories in the United States, where the 1997 production forecast has been reduced significantly since June. Global end-of-season rice stocks are also forecast to decline from the previous year, primarily due to smaller carryovers in China and India. Although wheat stocks are forecast to rise, mainly among the importing countries, global wheat inventories will remain much reduced compared to the levels of the early nineties. Globally, the ratio of end-of-season stocks in 1998 to trend utilization in 1998/99 is forecast to remain at about 15 percent, well below the 17-18 percent range the FAO Secretariat considers the minimum necessary to safeguard world food security.
 
 

FOOD EMERGENCIES PERSIST IN 29 COUNTRIES

FAO's latest assessment indicates that in total, 29 countries continue to face food emergencies due to man-made and/or natural disasters. Food supply difficulties are worsening in several parts of eastern Africa, mainly due to the impact of the unfavourable weather. In Ethiopia, the short rains failed in several areas resulting in poor "belg" crops. In Kenya, the food supply situation remains tight with prices at high levels following the reduced 1996/97 grain production. In Uganda, a smaller crop than last year is being harvested and prices of maize and beans have risen significantly. The situation is particularly difficult in the eastern part hit hardest by the drought and the northern part affected by civil strife. In Somalia, the recently gathered "Gu" crop is estimated to be the third consecutive reduced harvest. In Tanzania, the 1997 cereal crop, still being harvested, is expected to be substantially below last year’s. In Burundi and Rwanda production is larger than last year but still sharply down from pre-crisis levels. In Sudan, the food situation remains precarious in several states of Darfur and Kordofan, affected by two successive poor harvests. In western Africa, growing conditions are mostly satisfactory in the central and eastern Sahel, but drought conditions have affected crops in western parts. Elsewhere in western Africa, the recent political upheaval in Sierra Leone is likely to affect agricultural activities and limit 1997 rice production. In Liberia, the food situation, though still difficult, is gradually improving. In Southern Africa, the overall food supply outlook remains favourable, but continued food assistance is needed by several countries, particularly Angola and Mozambique. Locust damage to crops has been reported from Madagascar. 

In Asia, a recent FAO/WFP mission has found that against the backdrop of two successive years of floods in 1995 and 1996, this summer brought prolonged drought and a destructive typhoon to Korea DPR, which extensively damaged crops. Food output is likely to fall appreciably, which will undoubtedly have serious and long reaching repercussions on the country’s already grave food supply situation, especially in 1998. Elsewhere, serious food supply problems persist in vulnerable sections of the population in Mongolia. In Iraq, the food supply situation has eased with the implementation of the oil-for-food deal, but malnutrition still remains a serious problem throughout the country. 

In the CIS, targeted food aid to vulnerable populations continues to be required in Armenia, Azerbaijan, Georgia, and particularly Tajikistan, where an estimated two-thirds of the population are living in dire poverty as a result of intermittent civil strife.



CURRENT PRODUCTION AND CROP PROSPECTS 
POSITION BY REGION



ASIA

Harvesting of the 1997 wheat crop is complete in most of the region's major producing countries. The estimate of aggregate output has been revised up by almost 15 million tons, since the previous report in June, to 245.3 million tons, some 17 million tons up from last year's already above-average crop following generally favourable weather conditions throughout the later stages of crop development and maturation in the major producing areas. In China, output is now estimated at 120 million tons, 10 million tons up from the projection before the harvest. In India, the estimate of wheat output has also been revised up by some 4 million tons, from earlier expectations, to 68.7 million tons, while in Pakistan, latest estimates put the 1997 wheat crop at 16.3 million tons, up 500 000 tons from earlier forecasts but still somewhat below last year's crop.

In contrast to wheat, the overall outlook for the 1997 coarse grains crops in the region has deteriorated since the last report due to adverse weather conditions in several areas, particularly in China. FAO provisionally forecasts aggregate 1997 coarse grain output in the region at 199.6 million tons, about 16 million tons down from earlier projections and 7 percent down from last year. In northern parts of China a severe drought has affected crops on around 20 million hectares, particularly in eastern parts of the main producing provinces of Shandong and Hebei. Total coarse grain production in China is now forecast at 123.2 million tons, 14 million tons lower than last year's good level. In the Democratic People’s Republic of Korea, an FAO/WFP Crop and Food Supply Assessment Mission which visited the country in August has confirmed that dry weather in June and July coupled with above normal temperatures resulted in extensive crop damage, especially for rainfed maize in northern parts and rice in areas dependent on irrigation from rainfed reservoirs. Some crop damage also occurred in the aftermath of Typhoon Winnie. Dry conditions also affected crops in central parts of Thailand in June, though rainfall in July helped ease conditions. In contrast, in the first two dekads of July heavy rainfall in eastern parts of India and in Bangladesh and Pakistan in early August caused flood damage to crops. Torrential rains in the aftermath of typhoon Victor caused flooding in eastern Cambodia and parts of Laos, damaging crops.

In Afghanistan, an FAO/WFP Crop and Food Supply Assessment Mission in July estimated the 1997 cereal crop at 3.7 million tons, 18 percent up from the previous year and the largest crop since 1978, reflecting favourable weather conditions and relatively little pest damage. In Iraq, cereal production in 1997 is estimated by FAO at only 2.2 million tons, the lowest level since 1991 due to low use of inputs and continued degradation of agricultural land and machinery.

WORLD CEREAL PRODUCTION - FORECAST FOR 1997
Wheat  Coarse grains  Rice (paddy)  Total 1
1996  1997  1996  1997  1996  1997  1996  1997
( . . . . . . . . . . . . . million tons . . . . . . . . . . . . . ) 
Asia  228.7  245.3  215.1  199.6  518.9  517.5  962.7  962.4
Africa  22.8  15.1  87.4  80.7  15.7  16.0  125.8  111.8
Central America  3.6  3.7  26.5  27.8  1.9  1.9  32.0  33.5
South America  22.0  19.8  54.3  61.6  18.2  18.1  94.5  99.6
North America  91.9  91.9  296.2  288.7  7.8  8.3  395.9  388.9
Europe  128.3  132.0  159.1  161.2  2.9  2.6  290.3  295.8
CIS  68.9  75.9  55.8  60.2  1.3  1.5  126.0  137.6
Oceania  23.8  16.5  11.3  7.9  1.0  1.4  36.1  25.8
WORLD  590.1  600.2  905.7  887.8  567.6  567.4  2 063.4  2 055.4
Developing countries  273.8  280.9  372.2  360.4  541.8  541.4  1 187.8  1 182.6
Developed countries  316.4  319.3  533.5  527.5  25.8  26.0  875.6  872.8
SOURCE: FAO
1/ Total cereal, including rice in paddy terms.

The region's 1997 paddy output is expected to decline slightly from last year’s record level to about 517 million tons, largely due to weather related problems in some of the major producing countries. Drought in north eastern parts of China and floods in the south during the month of July are expected to lead to a slight decline in that country’s paddy output. Wet weather in the south disrupted the harvest of early double crop rice. Total paddy production in China, including the Province of Taiwan, is now forecast at about 195 million tons, down from the record crop of 197 million tons last year. In Japan, planting of the 1997 rice crop is complete but the condition of the crop ranges from slightly below average to average. Paddy output in 1997 is expected to decline by about 6 percent to 12.2 million tons. In Vietnam, seasonable showers continued to provide favourable conditions for the development of the main season rice crop across the country and a slight increase in paddy output is expected. In the Philippines, near normal rainfall was recorded during the month of July and the main season rice crop conditions are rated average to good. However, a strong likelihood of below-normal rainfall, related to the current El Niño weather event, towards the end of the year has prompted the Agriculture Department to encourage farmers to use early maturing rice varieties during the upcoming October-December planting of the secondary rice crop.

Some states in India received below normal monsoon rains through mid-July while others received very heavy rainfall which caused significant flooding in some rice producing areas. This adverse weather may cause farmers in the affected states to switch to lower yielding but early maturing varieties. Rice transplanting in the state of Andhra Pradesh, which produces about 11 percent of India’s Kharif season rice, is progressing slowly and is reported to be behind schedule. If the monsoon retreats early, the rice output in this state would be reduced. However, many other producing states received timely monsoon rains facilitating transplanting operations which are almost complete in the northern, central and eastern states. In Bangladesh, the Boro crop harvest has been completed and the Aus crop harvest is in progress. Paddy output for 1997 is tentatively forecast at 28 million tons, virtually unchanged from the previous year and 8 percent above the ten-year average. However, the final outcome will depend on the extent of flood damage to rice crops during mid-July.

In Thailand, harvesting of the second-season paddy crop is complete. Planting of the main season crop is in progress but fieldwork has been delayed in some parts due to lack of sufficient rainfall. Farmers in north-eastern Thailand, who produce about 43 percent of the main rice crop, are reported to have increased the area allocated to the production of

fragrant rice in response to this year’s premium prices. Total output will largely depend on weather conditions in the next few months. In Myanmar, paddy output in 1997 is expected to be 17 million tons, the lowest in the past four years. The decline is partly due to a 4 percent reduction in rice area and lack of adequate inputs, such as fertilizers and fuel. Harvesting of the main season crop is complete in Indonesia and weather conditions have been generally favourable. Planting of the second crop is underway and it is reported that water supplies are sufficient for irrigation requirements. Paddy production in 1997 is forecast at 52 million tons, a slight increase from 51 million tons in 1996.



AFRICA

NORTHERN AFRICA: Production of wheat in 1997 is estimated at 9.2 million tons, 44 percent down compared with last year’s above-average crop of 16.4 million tons, mainly due to unfavourable growing conditions. Most of the countries in the sub-region harvested below-normal crops. Production declined by almost three-quarters to 750 000 tons in Algeria and by two-thirds in Tunisia to 660 000 tons, while in Morocco output is about 60 percent lower than in previous year. Output of the almost entirely irrigated crop in Egypt is estimated at 5.5 million tons, marginally below last year's level. The sub-region's coarse grain crop in 1997 has also been affected by unfavourable weather. Aggregate output is estimated at 8.9 million tons, some 4.4 million tons less than last year.

Paddy production in Egypt, where the bulk of the sub-region’s rice is produced, is forecast to reach a new record in 1997 of 5 million tons, up from the previous record last year of 4.9 million tons. The expected increase in paddy output is largely due to Egypt’s removal of restrictions on the area under rice that had been announced at the start of the season. Egypt’s 1997 rice area is now estimated at a record 609 000 hectares, 3 percent up from 1996.

WESTERN AFRICA: Prospects are unfavourable for the coarse grains crops in the western part of the Sahel. The dry spell which started in mid-July over Senegal, The Gambia and Mauritania persisted in late July and early August over most parts of the centre and the north of Senegal and over western Mauritania. In The Gambia, rains resumed in late July after the dry spell of mid-July but precipitation remained limited. In the affected areas, the millet and sorghum crops which had been planted in June/early July failed or have been severely affected by the dry spell. Replanting of coarse grains could be undertaken following the rains which resumed in mid-August and intensified in late August/early September in the centre and the north of Senegal and in Mauritania. However, only short cycle varieties have much chance to reach maturity if the rainy season continues to late October. Despite the abundant and widespread rains which have been registered in late August/early September, below average harvests are anticipated in Senegal, The Gambia and Mauritania. In the eastern part of the Sahel, weather conditions have been much more favourable with generally above normal rainfall in Chad and widespread and regular rains in Niger. In between, in the central part of the region, precipitation remained generally regular and widespread in Mali and Burkina Faso. In Cape Verde, abundant rains have been received in late August on all islands.

Growing conditions for the 1997 paddy crop have been generally favourable in most countries across the sub-region, and crops are reported to be progressing well. Assuming normal growing conditions continue, the sub-region’s paddy production is forecast to increase slightly in 1997, for the third consecutive year, to about 6.7 million tons, due mostly to an increase in plantings. In Nigeria, the largest rice producing country in the sub-region, planting is complete and the area is estimated to have expanded by 15 percent to 2 million hectares. Production is forecast to increase by about 6 per cent to 3.3 million tons. In Côte d’Ivoire, where rice planting is nearing completion under favourable conditions, paddy production is forecast at 820 000 tons, virtually unchanged from the previous year despite a 7 percent reduction in area. In Sierra Leone, civil strife continues to disrupt agricultural activities and paddy production in 1997 is not expected to be much higher than the 391 000 tons produced last year.

CENTRAL AFRICA: Abundant and widespread rains over Central Africa and Cameroon have favoured development of the 1997 coarse grains crops. The harvest of the first maize crop is drawing to an end in Cameroon, Central African Republic and Congo. Seasonally dry conditions prevail in the south and the west of the Democratic Republic of Congo as well as in Gabon and the centre and south of Congo. The rice area in the sub-region is expected to increase by 3 percent in 1997. Assuming favourable weather conditions for the remainder of the growing season, paddy output is forecast to increase by about 4 percent from 1996 to 555 000 tons.

EASTERN AFRICA: The outlook for the sub-region’s 1997 wheat crop is favourable. In the Sudan, where the crop was harvested earlier in the year, output increased substantially to an above-average level of 650 000 tons. In Kenya, the crop, to be harvested from October, is forecast higher than last year reflecting an increase in the area planted and good weather so far. In Ethiopia, generally normal weather in recent months has favoured establishment and development of the wheat crop.

Prospects for this year’s coarse grains production in the sub-region are mixed. In Somalia, the recently harvested main "Gu" crop is estimated at 241 000 tons, around last year’s reduced level. A decline in plantings was mostly offset by better yields. By contrast, in Burundi and Rwanda, the output of the second season crops increased from the previous year reflecting generally good weather and improved security conditions, which allowed many refugees to return to their homes and recommence agricultural activities. In Uganda, where the harvest of the second season crops is well advanced, reduced output is expected as a result of insufficient rains during the season. The first season crops were also affected by unfavourable weather in some areas and the aggregate production of coarse grains is estimated to be lower than last year. In Tanzania, the "Masika" crops, now being harvested, are reported to be in fairly good condition. However, the output of the recently harvested main "long-rains" season crops were reduced by late and insufficient rains. The "Vuli" crop harvested earlier in the year was also poor and the 1997 aggregate production of coarse grains is estimated to be substantially lower than in the previous year. In Kenya, rains from mid-June following a dry spell, improved prospects for the main season maize crop to be harvested from October. Output of coarse grains is forecast to increase from last year’s reduced level. In Ethiopia and Eritrea, where the harvest is scheduled from December, early prospects for the crops are favourable reflecting generally good weather so far. In the Sudan, more rains are needed for the current coarse grains planting season following below average precipitation in July. Rice harvesting is underway in Tanzania, the major rice producer in the sub-region, and output in 1997 is provisionally estimated at about 650 000 tons.

SOUTHERN AFRICA: Harvesting of the 1997 coarse grain crops (mostly maize) in the sub-region was completed at the end of August. Aggregate production in 1997 is estimated at 17.1 million tons, 2.4 million tons less than last year’s bumper harvest but 14 percent higher than the average for the previous five years. Increased production in Malawi, Mozambique and Namibia were more than offset by lower output in all other countries of the sub-region with South Africa accounting for the bulk of the reduction. In Malawi production increased by about 10 percent to 2.05 million tons while in Mozambique output, estimated at 1.46 million tons, was some 220 000 tons higher than in the previous year. This fifth consecutive increase in coarse grain production in Mozambique is largely due to an increased area planted, favourable weather and higher yields in some provinces. The output from the 1997 maize crop in South Africa, the largest producer in the sub-region, is estimated at 8.8 million tons, 2 million tons less than the above-average 1996 harvest, due to irregular rains which reduced yields in many areas.

Re-emergence of the El Niño phenomenon in the equatorial Pacific Ocean since March this year points to a strong possibility of poor rainfall in the sub-region later in the 1997/98 crop season, which could have an adverse impact on food production next year. However, currently the situation remains satisfactory. Following good rainfall and abundant irrigation water in most of the major dams, the outlook for the sub-region's wheat crop, is favourable. In South Africa the production of wheat is forecast to be some 350 000 tons lower than last year’s record crop but 20 percent higher than the average for the previous five years. Paddy production in Madagascar, which accounts for over 90 percent of the sub-region’s rice output, is expected to be close to the previous year’s output of 2.5 million tons. While production increased in most provinces, it dropped sharply in the Tulear province where the rice crop was severely damaged by locust. In Mozambique, a 20 percent increase in rice area is expected to boost the country’s production to a record 180 000 tons in 1997, despite earlier reports of flood damage to the crop.



CENTRAL AMERICA AND THE CARIBBEAN

The current strong El Niño weather phenomenon which has been observed since March this year gives cause for concern in the region, which is particularly vulnerable, and experiencedsevere crop losses and damage to infrastructure during the last analogous event in 1982/83. However, the most intense impact of El Niño is expected from December to March which would coincide with the region’s lean season for grains, as crops of the secondary season (from late August to December) will be mostly harvested.

Moderate precipitation in early August, in the main wheat producing irrigated areas of the north west in Mexico, the region's major producer, replenished water reservoirs which had earlier been depleted due to dry conditions. Planting of the 1997/98 crop is due to start from October. Assuming normal rains, early indications point to a slightly above-average area, similar to the previous year.

Prospects for the main season coarse grains crops in the region are uncertain. This year’s warmer and early onset of the dry period resulted in reductions of the area planted in parts and is adversely affecting the development of the crops in the ground. In Honduras, unseasonably high temperatures and dry weather have been reported since mid-July in central and, particularly, southern areas of the country, affecting the main season maize, sorghum and bean crops. In El Salvador, below-normal and irregularly distributed rains have been reported since end-June from all parts of the country, causing damage to the first season crops, particularly maize, in some areas of the east. Overall, official forecast point to a decline of 15 percent in production of the main maize crop from last year’s good level. In Guatemala, insufficient precipitation during the season in southwest, southeast and central parts, has stressed crops, mainly maize. In Nicaragua, unseasonably dry weather from late June, following earlier irregularly distributed rains, is likely to result in yield reductions of the first season cereal crops. In the Dominican Republic, well below average precipitation in July has reduced water reservoir levels for planting of the secondary irrigated rice crop. Dry weather has also affected the minor rainfed maize and sorghum, and other foodcrops. In Costa Rica and Panama, as well as in Mexico, the largest producer of the sub-region, no critical anomalies in weather conditions with consequent damage to crops have been reported so far.

The region's 1997 paddy production is forecast at 1.9 million tons, virtually unchanged from last year’s level but 5 percent down from the ten-year average. In the Dominican Republic, the rice area is estimated at an average 100 000 hectares, but precipitation has been below normal, affecting crop development in some parts of the country, and harvesting of the early seeded rice crop is behind schedule. Paddy output for 1997 is forecast to be about 0.6 million tons, compared to 0.5 million tons last year.



SOUTH AMERICA

Several countries in the South American region, as for the Central American countries to their north, are potentially vulnerable to weather anomalies which can occur during an El Niño weather phenomenon. However, the overall impact of the current El Niño event on crop production is not yet alarming. Precipitation and temperature anomalies are being experienced in several parts of the region, but adverse impacts on crops have been localized so far. The potentially strongest impact of El Niño will coincide with the planting of the 1998 main season cereal crops which may be affected by floods in northern areas and dry weather in southern parts.

In southern countries of the sub-region, where planting of the 1997/98 wheat crop is completed or in the final stages, above average rains in the past months have generally benefited soil conditions for planting and emergence of the crop. However, in Argentina, where planting of wheat continues until September, heavy rains have delayed sowing operations in parts. In Chile, above-average precipitation in early June caused serious floods in northern and central parts, damaging infrastructure and housing, but improved soil conditions for developing crops following a prolonged dry spell. In Brazil and Uruguay abundant rains have maintained adequate soil moisture for the wheat crop. In Ecuador, harvesting of the modest 1997 first season wheat crop is well advanced in the highlands, where most of the crop is grown, and a slightly above-average output is expected. In Peru, the bulk of the 1997 harvest has been completed and output is provisionally estimated to be above average. By contrast, in Colombia, harvesting of the first season crop continues and production is expected to be below average.

Harvesting of the 1997 coarse grain crops has been completed in the southern areas of the sub-region and near-record to record maize outputs have been obtained in all countries. Fieldwork is underway in preparation for planting of the 1998 crops to start in September/October. The aggregate area planted will depend largely on weather developments in the coming weeks. Should current forecasts of above-normal rains for the southern areas materialize, reductions in the area planted are likely to occur. In the Andean countries, well above average temperatures and floods have been registered in the past months in some areas. In general, these weather anomalies did not affect the 1997 main season cereal crops as the bulk of the harvests were already completed by June. However, in Bolivia, planting of the winter sorghum crop in July was adversely affected by scarce and irregular rains. As a result, the area was reduced from last-year's above-average level, and lower yields are anticipated. In Ecuador, harvesting of the 1997 maize crop is almost completed and provisional estimates point to a near-record output. In Peru, the maize harvest is well advanced and the amount collected to date exceeds the record output gathered by the same time last year. In Colombia, the first season maize harvest is almost completed, while planting of the second season crop has started in some areas of the country. In Venezuela, torrential rains and flooding in July have affected the ongoing coarse grain planting season. Nevertheless, above-average maize plantings are expected, while the area planted to sorghum is expected to be reduced as a result of the strong import competition.

Harvesting of the 1997 paddy crop is complete in most countries in the region and land preparation for planting of the 1998 crop is underway in some countries. The region’s 1997 paddy output is estimated at just above 18 million tons, down slightly from 1996. The decline is largely attributed to a 10 percent reduction in plantings in Brazil, the region’s largest rice producer, where, as a result, paddy output is forecast to fall to a below-average 9.7 million tons. A smaller crop is also forecast in Venezuela. By contrast, rice output is estimated to have risen significantly in Argentina, to 1.2 million tons, and to have increased somewhat also in Colombia and Uruguay. Paddy output in Peru is expected to be similar to last year’s 1.2 million tons.



NORTH AMERICA

The bulk of the United States' 1997 winter wheat crop has been gathered and the spring wheat harvest is well underway. Following generally favourable conditions for harvesting operations and the development of the spring wheat crop, official estimates for wheat production have been increased significantly over the last two months. Winter wheat production is now estimated at 50.5 million tons, about 25 percent up from last year's poor crop. The forecast for spring wheat output has also been revised up marginally, to about 18.4 million tons, which would be virtually unchanged from the good crop last year despite a reduction in plantings. In Canada, prospects have deteriorated for the bulk of the spring wheat crop during July and early August due to generally hot and dry conditions which have reduced moisture availability and led to premature maturation in parts. The exception is the Peace River region in northern Alberta where ample moisture has been available throughout the season. In the previously flooded Red River valley, crops need continued hot weather to make use of available moisture. Based on the latest official estimates of seeded area for the 1997 harvest, and crop conditions in late August, which point to sharply lower yields than last year, wheat output in 1997 is now forecast at 23 million tons, 23 percent down from 1996.

Prospects for the 1997 coarse grain crop in the United States have deteriorated somewhat over the past two months due to hot and dry weather in the major producing Corn Belt states. The latest (12 August) USDA crop report puts aggregate coarse grain production at 263.1 million tons. Of the total, maize was forecast at 235.6 million tons, down from earlier projections and marginally below last year's crop despite a slight increase in area. Sorghum output is forecast at about 16 million tons, much lower than in 1996 due to a reduction in plantings. However, with the main coarse grain crop harvest still some way off, the final outcome will still depend largely on the weather through early October. In Canada, prospects for the main coarse grain crop (mostly barley) are similar to those for the country's wheat crop. Hot and dry conditions have stressed plants during the development stage. Aggregate coarse grains output is now officially forecast at 25.7 million tons, about 10 percent down from last year.

In the United States, the rice area expanded to 1.23 million hectares in 1997 from 1.13 million hectares in 1996. Unseasonably cold and damp conditions during the spring delayed rice planting in some states which may lead to late harvesting in those areas. However, at the beginning of August, over 80 per cent of the crop was rated to be in good to excellent condition. Harvesting has already started in some of the southern states and for the country as a whole, paddy output in 1997 is forecast to increase by 6 percent to about 8.3 million tons.



EUROPE

Prospects for the bulk of the 1997 wheat and coarse grains in the region remain generally satisfactory. Despite localized weather disruptions to harvests in August, which were quite severe in several eastern countries, most of the cereal crops in the central and southern parts of the region have now been gathered, and latest indications still point to an increase in aggregate wheat and coarse grains production. A slight reduction in output in the EC is expected to be more than offset by larger crops elsewhere in the region.

In the EC, latest indications continue to point to another above-average cereal crop in 1997 although the quality of many crops may be poorer than normal due to heavy rains during the harvest. FAO's latest forecast puts the EC's 1997 cereal crop as 203 million tons, down from the record crop of 208 million tons last year but still well above the average of the past 5 years. Overall plantings are estimated to have risen by about 2 percent but yields are expected to be down from last year's bumper levels. Crop potential was affected in many parts by drought conditions earlier in the season, and recent heavy rainfall, particularly in the south of the United Kingdom and Germany, is hampering crop maturation and harvesting leading to concerns of further loss of yield and crop quality. The bulk of the reduction in this year's cereal output is in wheat, which is now forecast at 95.7 million tons, slightly less than expected earlier and some 4 million tons down from last year. The aggregate coarse grain crop is forecast to fall only marginally to 104.7 million tons from 105 million tons in 1996.

In eastern parts of the region prospects for the 1997 cereal crops have deteriorated in some parts due to heavy rains and flooding over the past few weeks. In Bulgaria, although recent heavy rains have delayed the harvest and could seriously affect the quality of the remaining standing crops, the amount of wheat gathered by end-July already indicated a strong recovery in 1997 wheat output, from last year's drought-reduced level, to well over 3 million tons. In the Czech Republic, heavy rainfall since early July has caused severe flooding in eastern parts of the country leading to complete crop losses in some parts and crop lodging and harvest delays throughout a large area. The latest official forecast of the 1997 cereal crop in June, before the heavy rain and flooding, put output at nearly 7 million tons. Although, it is still too early to assess accurately the full extent of the damage, indications are that losses could be in the region of between 500 000 to 1 million tons. In Hungary, heavy rains in July hampered wheat harvesting but improved conditions for the developing maize crop. The latest official forecast of the 1997 wheat output is 5 million tons, well up from the reduced crop of 3.9 million tons in 1996, although the quality is likely to be poorer than normal. Following the recent rains, prospects for the summer maize crop have improved and output is now expected to at least equal last year's good crop of 5.9 million tons.

Heavy rainfall in Poland in July also led to flooding and crop loss in some parts and delayed harvesting. Latest estimates indicate that some 120 000 hectares of cereals have been destroyed which, based on average yield expected, could cut the potential 1997 harvest by some 500 000 to 1 million tons, mainly spring wheat and barley and to a lesser extent rye. However, another good harvest was in prospect, and even allowing for the recent losses, the latest official forecast in August puts the 1997 cereal output at 24.3 million tons, compared to 24.6 million tons in 1996. In Romania, prospects for the 1997 cereal crop have also been affected by heavy rains and flooding. Latest official forecasts put the 1997 wheat cop at 6.9 million tons, down from the earlier anticipated 7.1 million tons. However, if weather conditions do not improve rapidly in the remainder of the harvest season, losses could be greater. In the Slovak Republic, the 1997 cereal crops have also been damaged by adverse weather and output is expected to be somewhat lower than last year's 3.3 million tons. In the Baltics, the 1997 cereal harvest is expected to remain close to last year’s good level of 2.6 million tons including 1.6 million tons of wheat.

The 1997 paddy crop season in Europe is quite advanced and harvesting is expected to start in September. Latest estimates indicate that the area declined slightly for this year's crop and lower yields are expected because of unfavourable conditions in the main producing areas. Total paddy output in the EC is now forecast at 2.6 million tons, 8 percent down from last year.



COMMONWEALTH OF INDEPENDENT STATES1/

In the Commonwealth of Independent States (CIS), the outlook for the 1997 grain harvests is generally good and output is expected to be larger than last year in most states. Even with considerable losses due to excessive rains, output in Moldova and the Ukraine is likely to recover sharply while production in the Russian Federation, Georgia and Tajikistan is also expected to increase. Harvesting of the winter grains has started and early reports point to a significantly larger output than last year. However, wet weather in European parts and shortages of fuel and equipment are delaying harvest activities and causing losses in both yield potential and grain quality. Spring grains have benefited from unusually good moisture supplies. FAO’s latest forecast of the 1997 total cereal and pulse harvest in the CIS has been raised to 141 million tons, some 12 million tons more than estimated output in 1996.

Output of wheat is provisionally forecast to rise to 76 million tons compared with the FAO‘s estimate of 69 million tons in 1996 in response to a slight increase in the area sown and better yields. Output of coarse grains remains uncertain as spring coarse grains are still developing but good moisture supplies point to higher yields. Early indications are that the area sown to coarse grains may have fallen only marginally and aggregate output could increase by 5 million tons to 60 million tons. Output of paddy is expected to remain fairly flat in response to import competition but that of pulses, which are in demand as a protein-rich fodder crop, could rise to nearly 4 million tons (1996: 3.3 million tons).

In the Russian Federation the area sown to grains remained stable and output is provisionally forecast to rise to 77 million tons from an estimated 75 million last year. Higher yields are expected to offset the larger proportion of spring wheat and the small reduction in the coarse grain area, and output of both wheat and coarse grains are tentatively forecast to increase. Output of wheat is now put at

40 million tons (1996: 38.5 million tons) and that of coarse grains at almost 35 million tons (1996: 34.2 million tons). In the Ukraine, indications are that the area sown to both wheat and coarse grains increased sharply and aggregate output could reach 36 million tons (cleaned weight), including 19 million tons of wheat. By contrast, in Kazakhstan, many farms which were privatized in the course of 1996 have not been able to mobilize adequate working capital and the area sown to grains is reported to have fallen by 1.6 million hectares, of which 850 000 hectares under wheat representing some 7 percent of the area under this crop.. Growing conditions have been mostly good but fuel shortages are likely to disrupt the harvest and could keep output close to last year’s level estimated by FAO at about 12.5 million tons. In most smaller countries, the areas sown to wheat have increased further at the expense of coarse grains, fodder crops, fruit, vegetables and cotton. Despite a better harvest anticipated in Tajikistan and slightly increased output in Uzbekistan and Turkmenistan, all three countries will continue to need to imports of wheat. In the Kyrgyz Republic, another good harvest is in prospect following a further sharp increase in the area sown and generally satisfactory weather. In the Caucasus, lower wheat and barley yields could be offset by the increase in the areas sown in Armenia and Azerbaijan; Georgia has reported a record harvest.

The 1997 rice area in the CIS is estimated at about 0.5 million hectares, similar to 1996. However, yields are forecast to increase, and aggregate paddy output is expected to reach about 1.5 million tons, up from 1.3 million tons last year. The Russian Federation and Uzbekistan, the two largest rice producers in the region, have accounted for about 67 percent of total regional rice production since 1991. For 1997, paddy outputs in the Russian Federation and Uzbekistan are forecast to increase by 36 percent and 15 percent to 545 000 tons and 550 000 tons, respectively.

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1/ The Commonwealth of Independent States (CIS) includes 12 member states (Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, the Kyrgyz Republic, Moldova, the Russian Federation, Tajikistan, Turkmenistan, the Ukraine and Uzbekistan).  



OCEANIA

Prospects for the 1997 winter wheat and coarse grain crops in Australia have deteriorated over the past two months due to persisting dry conditions which have been attributed to the development of a particularly strong El Niño weather event in the equatorial Pacific Ocean. The adverse weather has so far mainly been concentrated in eastern and southern Australia where June and July rainfall was well below average. In mid-August, some scattered showers brought much needed relief to crops in the southern wheatbelt. However, reflecting the generally poorer than normal growing conditions during the winter, the Australian Bureau of Agricultural and Resource Economics' (ABARE) forecast for the 1997 wheat crop remains well below earlier expectations at 16.2 million tons, which would be some 30 percent down from last year's record output of 23.6 million. A significant reduction in production of barley (the main winter coarse grain) is also expected, with output now forecast at just over 4 million tons, compared to 6.6 million tons in 1996. However, the outcome of the 1997 winter crop harvest will still depend greatly on weather conditions during the remainder of the season. Adequate soil moisture at planting time ensured that most crops were well established, and if more rain comes soon above-average yields could still be achieved even if the season's total rainfall is below normal.

The 1997 paddy crop in Australia, which accounts for over 95 percent of the regional paddy output, is estimated at an above-average 1.4 million tons, up from 951 000 tons in 1996. The sharp increase is a result of a 10 percent expansion in area and notably improved water supplies in New South Wales, where most of Australia’s rice is grown.


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