FAO/GIEWS - Food Outlook, November 1997

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Cereal shipments in 1996/97 sharply below earlier expectations and smallest in 4 decades

Based on the latest information, total cereal shipments in 1996/97 (1 July through 30 June) under programme, project and emergency food aid, fell for the fourth consecutive year to about 4.9 million tons, some 2.5 million tons less than earlier forecast and 2.9 million tons, or 37 percent, below the previous year (Table A.10). Estimates of total 1996/97 grain shipments under the Food Aid Convention (FAC), including pulses and derived products slightly exceeded the 1995 agreed minimum commitments of 5.35 million tons (in wheat equivalent) 2/. At this level, food aid shipments would be the smallest since the start of food aid programmes in the mid-1950s, some 10 million tons below the level reached in 1992/93 and less than a half of the target established by the World Food Conference in 1974. Most of the decline in 1996/97 was on account of smaller shipments from the EC and the United States, although their 1996/97 contributions continued to represent more than 70 percent of total grains shipped as food aid. As regarding shipments channeled multilaterally in 1996/97, their share of total shipments increased from the previous year mainly because of the decline in bilateral aid flows.

The decline in food aid volume in 1996/97 was reflected in smaller shipments to all regions and to the group of LIFDCs. Total cereal shipments to LIFDCs fell to about 4 million tons, 2.6 million tons, or 39 percent, below the previous year. At this level, the proportion of cereal shipments to LIFDCs covered by food aid plunged to just over 6 percent, a ratio well below previous years and substantially smaller than in the early 1980s when it averaged above 20 percent. Only a few countries (namely, Afghanistan, Haiti, and Sudan), received more food aid in 1996/97 than in the previous year.

1/ More detailed statistics on cereal and non-cereal food aid shipments are available on the Internet as part of the FAO World Wide Web at the following URL address: http://www.fao.org under Statistical Database and then All Databases.
2/ "Grains" under the Food Aid Convention include wheat, barley, maize, millet, oats, rye, sorghum, rice, derived products, and also pulses. The members could also provide cash equivalent against their minimum annual amounts. Members of the 1995 Food Aid Convention includes Argentina, Autralia, Canada, the European Community and its members, Japan, Norway, Switzerland, and the United States.

1993/94  1994/95  1995/96  1996/97  1997/98 
( . . . . . . . . . . . . . . thousand tons . . . . . . . . . . . . . . ) 
WORLD  13 007  9 443  7 743  4 872  5 000
LIFDC  7 867  7 934  6 700  4 116  4 200
Africa  3 696  3 593  2 652  1 816 
Sub-Saharan  3 271  3 348  2 402  1 641 
Others  425  246  250  175 
Asia  2 662  2 492  2 908  2 015 
East Asia and SE Asia  297  308  894  550 
South Asia  1 536  1 600  1 350  942 
Others  828  584  665  523 
Europe and the CIS  5 066  2 213  1 590  542 
Latin America and the 
Caribbean  1 583  1 146  592  499 
SOURCE: 1993/94 - 1996/97, WFP; 1997/98 forecast, FAO
Note: Totals computed from unrounded data.

Within the EC, a clear departure from the past trend is emerging as the importance of the Community Action (organised by the European Commission) in supporting shipments under programme food aid diminishes. Last year, total cereal shipments under the Community Action were only 880 000 tons, down by 900 000 tons, or 50 percent, from the already reduced 1995/96 level. The decline is mainly because of recent changes in the rules within the EC regarding food aid modalities that affect the composition as well as the distribution channels of food aid from the Community. Cereal food aid shipments from the United States in 1996/97 are estimated at just over 2 million tons, about 1 million tons, or 35 percent, below the previous year’s reduced level and as much as one-fourth of the 1992/93 volume. The reduction in food aid allocations in the United States stems from budgetary considerations, as well as smaller stocks in the past two seasons. Moreover, although grain prices were generally weaker in 1996/97 compared to the previous year, the aftermath of the surge in the 1995/96 season continued to put pressure also on shipments in 1996/97, especially during the first half of the season.

Cereal food aid shipments in 1997/98 are likely to remain close to the 1996/97 reduced level

Global cereal food aid shipments in 1997/98 (July/June) are likely to remain at around 5 million tons. While, to-date, information on food aid budget allocations provided to FAO by individual donor countries points to a further reduction in food aid budgets in most cases, food aid shipments in 1997/98 are likely to remain close to last year. This forecast takes into consideration the fact that since the beginning of the current season grain prices have remained considerably below the corresponding period in 1996/97. Moreover, as was mentioned above, the total amount of grain shipments under the FAC in 1996/97 just exceeded the minimum commitments agreed to in 1995. Thus, it is unlikely that this year’s shipments would fall below the 1995 agreed commitments. While the final outcome of the current discussions on the future of the FAC could eventually influence the size and the orientation of food aid, this will not be determined before 30 June 1998 and thus will not affect this year’s shipments.

Non-cereal food aid shipments fell in 1996 and are likely to fall further in 1997

The latest estimate for global food aid shipments of non-cereal food commodities in 1996 (January-December) is 862 000 tons, a reduction of about 336 000 tons, or 28 percent, from the 1995 reduced volume 3/. As with cereals, this decline affects all regions and also the LIFDCs. Among the major non-cereal food commodities, the decline in 1996 mostly reflected reduced shipments of pulses, edible fats, vegetable oils and skim milk, while shipments of fish (including products) also fell. By contrast, shipments of meat (including products) and dried fruit increased significantly. As regards 1997, given the slow pace of recorded shipments since the beginning of the current year, the eventual shipments of non-cereals as food aid in 1997 are likely to be even smaller than in 1996.

Contribution to IEFR and PROs also decline in 1996

Contributions to the International Emergency Food Reserve (IEFR) in 1996 fell to 849 000 tons for cereals from around 908 000 tons in 1995 (Table A. 11). Similarly, contributions were also reduced for non-cereals, to around 198 000 tons from 238 000 tons in 1995. As of September 1997, pledges to the 1997 IEFR have reached 651 000 tons for cereals and 142 000 tons for non-cereals. Contributions to the 1996 Protracted Refugee Operations (PROs), also directed by the WFP, amounted to 495 000 tons of cereals and 86 000 tons of other food commodities, when compared to 535 000 tons for cereals and 58 000 tons of for non-cereals in 1995. An estimated 486 000 tons of cereals and 64 000 tons of non-cereals have been pledged to-date under the 1997 PROs.

3/ While cereal shipments are monitored on a July/June basis, shipments of non-cereals are monitored on calendar year basis and the year 1997 is not yet complete.  

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