HIGHLIGHTS

FAO now estimates world cereal output in 1999 at 1 872 million tonnes, (including rice in milled terms), above average, and only slightly below the previous year's level. However, this would be below anticipated global cereal utilization in 1999/2000 and, as a result, global cereal stocks will have to be drawn down for the first time in 4 years.

The early outlook for 2000 cereal crops is mixed. In the northern hemisphere, winter wheat plantings fell in the United States, but the spring wheat area in Canada could rise. In Europe, the winter wheat area expanded in the EC and in several eastern European countries. In the southern hemisphere, prospects are favourable for the 2000 coarse grains crops in southern Africa and South America. In the equatorial belt and the southern hemisphere the harvest of the 2000 rice crop will start soon but plantings were reduced and output will be down.

Food emergencies persist in many countries throughout the world due to frequent natural hazards and, increasingly, by man-made disasters (see page 4).

FAO latest forecast of world trade in cereals in 1999/2000 is 222 million tonnes, 1 million tonnes more than earlier anticipated, and 7 million tonnes up from the previous year. Latest indications point to an increase of about 6 percent in global wheat shipments and 3 percent for coarse grains, but a 4 percent reduction for rice.

International export prices for most cereals strengthened in recent weeks. Latest indications of a tighter than expected cereal balance in the United States lent significant support to wheat and coarse grains markets in January, while some unexpected buying activity helped the FAO Rice Export Price Index gain one point from its December low.

Global meat output grew 2 percent in 1999 buoyed by low feed prices. World trade in meat also grew, surging by 5 percent, mostly as a result of recovering Asian demand and increasing use of export programmes. This expansion is unlikely to be replicated in 2000 as red meat supplies are expected to contract.

Prices of oilseed products are anticipated to recover in 1999/2000, in response to a tightening supply/demand situation. Oilseed production is expected to rise only marginally and overall output of oilcrop-based products is likely to fall short of demand. Regarding trade, a rise in shipments of oils and fats is expected to contrast with reduced growth in trade of oilcakes and meals.