Food Outlook
Global Information and Early Warning System

No. 10/11/12, 1997 - Rome, October/November/December 1997


A close cereal supply/demand situation will continue in 1997/98. Although production is now forecast to reach a record 1 888 million tons in 1997, this would just meet utilization requirements. Replenishment of the much reduced global cereal stocks will have to wait at least another year and would depend on another good crop in 1998. Early prospects are favourable for the winter crops being planted in the northern hemisphere, but the outlook is uncertain in some southern hemisphere parts where the strongest impact of El Niño is expected (see Special Feature on El Niño, page 8).

Food shortages continue to grip 29 countries worldwide, mostly in Africa. Adverse weather is the main cause of supply difficulties in most cases but civil strife and economic reforms continue to play a significant part. (See Food Emergency Box).

World imports of cereals in 1997/98 are forecast at 202 million tons, 4 million tons more than the reduced level in the previous year. The bulk of the increase is expected in coarse grains and rice, while wheat shipments will remain virtually unchanged.

Global cereal utilization in 1997/98 is forecast to grow by 2 percent, to 1 888 million tons. The expansion reflects a modest increase in food consumption of cereals and a continuation of last year’s strong growth in cereal feed use.

FAO’s first forecast puts cereal food aid shipments in 1997/98 at 5 million tons, similar to the the sharply reduced 1996/97 volume. Low-Income Food-Deficit countries received about 4 million tons of the 1996/97 total, which covered 6.5 percent of their estimated total imports compared to over 10 percent on average over the past 4 years.

International prices for wheat and coarse grains strengthened further in October, mainly influenced by active trading. By contrast, rice prices remained depressed reflecting the arrival of new crop supplies and limited new demand.

World cassava production is forecast to rise in 1997. Although demand continued to grow in most consuming countries, cassava usage in the EC was depressed by increased usage of domestic feed grains and the EC import price has fallen.

International prices for milk products are expected to increase during 1998 as a result of sustained international demand. World milk production is now firmly established in a phase of expansion, following its contraction in the early 1990s.

A tighter world sugar supply situation is forecast in 1997/98, putting pressure on international prices. Global production is forecast to increase marginally in the 1997/98 seasons but will be outgrown by consumption and a drawdown in stocks is expected.

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