Food Outlook
Global Information and Early Warning System on food and agriculture

-------------------------------------------------- No. 2, 1998 - Rome, April 1998


Export prices Graphic

FAO's first forecast of 1998 cereal production is 1 895 million tonnes, only slightly below last year's record. If current forecasts materialize, cereal supplies would be sufficient to meet expected consumption requirements in 1998/99 but global cereal reserves would continue to remain below minimum safe levels for world food security.

The number of countries facing food emergencies remains at 37, compared to 31 towards the end of last year, mainly due to the effects attributed to El Niño in Asia and Central America. However, Africa remains the continent with the most acute food shortages as a result of a combination of adverse weather and civil strife (see Box on Emergencies on page 4).

World wheat production in 1998 is forecast at 595 million tonnes, 3 percent down from 1997 and just on trend after above-trend crops in the previous two years. By contrast, global coarse grain output is forecast to increase marginally to 920 million tonnes, which would be above trend for the third consecutive year. The rice crop in 1998 is tentatively forecast to decline from last year's record to 380 million tonnes.

FAO's latest forecast of world trade in cereals in 1997/98 is 202 million tonnes, 1.4 million tonnes above the previous year’s reduced volume. Record rice imports forecast in 1998 are expected to account for all of this increase while imports of wheat and coarse grains are expected to decline slightly.

Global cereal utilization in 1997/98 is forecast at 1 889 million tonnes, 37 million tonnes up from 1996/97, due to increased food use of cereals in the developing countries and increased feed use in the developed countries. At the forecast level global per caput food consumption of cereals would remain unchanged from the previous year.

Total food aid availabilities of cereals in 1997/98 are forecast at 5.5 million tonnes, 12 percent up from the reduced volume in 1996/97, but still less than half the level of the early 1990s. For low-income food-deficit countries food aid is forecast to cover only 6.5 percent of their total cereal imports compared with 17 percent in the early 1990s.

International wheat and maize prices weakened further in recent weeks, reflecting large wheat supplies from the main southern hemisphere exporters and weaker demand for coarse grains from several countries in Asia. By contrast, international prices for rice from most origins strengthened during the first quarter of 1998, reflecting strong import demand and concerns over the size of export availabilities.

Cassava production, consumption and trade are estimated to have risen in 1997. Prospects for 1998 point to a contraction in global production, particularly among the major exporting countries, which may result in reduced trade this year.

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