FAO/GIEWS - Food Outlook No.2 - April 2000 p. 7

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Growth in Global Demand to Remain Slow in 1999/2000

World cereal utilization in 1999/2000 is likely to continue to expand, albeit very slowly, by about 0.5 percent to 1 885 million tonnes. At this level, total cereal utilization would be slightly below the long-term trend, after being at or above trend during the previous three years. The volume of cereals used for direct human consumption is currently forecast to rise by 1.4 percent, mostly among the developing countries, while global feed usage is expected to be up only slightly from the previous season. A second year of contraction is anticipated for "other uses" of cereals, which include post-harvest losses, in particular among the developing countries.

Food consumption of cereals increases for most developing countries

Virtually all the predicted increase in global food consumption of cereals would be accounted for by the developing countries, primarily in Asia and Africa. About 70 percent of the increase is among the low-income, food-deficit countries (LIFDCs) which are the most vulnerable to food insecurity. Among individual countries, significant increases in food consumption are expected in China, India, Indonesia and Viet Nam in Asia, and in Kenya and Nigeria in Africa. In southern and eastern Asia, good rice crops in 1999, abundant supplies of wheat, and low international prices have all encouraged consumption of food grains. Consumption could be further enhanced in India as the Government announced in January that it would increase its procurement of wheat by 6 percent for subsidized sales to the poor during April/March 2000/01.

World Cereal Utilization

  1997/98 1998/99 1999/2000 f'cast
  (. . . . . . million tonnes . . . . . .)
Total utilization      
World 1 869 1 875 1 885
Developing countries 1 109 1 135 1 143
Developed countries 760 740 743
Food consumption1/      
World 947 967 981
Developing countries 779 798 811
Developed countries 168 169 170
Feed use      
World 663 655 656
Developing countries 221 223 224
Developed countries 442 431 433
Other uses 2/      
World 259 253 249
Developing countries 110 113 108
Developed countries 149 140 140

Per Caput Food Consumption of Cereals

  1997/98 1998/99 1999/2000
  (. . . . . kg. per head . . . . .)
Developing countries 172 173 173
Developed countries 130 130 130
TOTAL 163 164 164
Low-income food-deficit countries 178 180 180
(excluding China and India) (158) (160) (161)
Wheat 71 71 71
Coarse grains 33 33 33
Rice (milled) 59 60 60

Globally, the growth in world food consumption is forecast to keep pace with the rise in population, resulting in per caput food consumption of cereals remaining unchanged at 164 kilograms in 1999/2000. In the LIFDCs as a group, per caput consumption would remain relatively stable, but some countries in sub-Saharan Africa and Asia could face a decline due to smaller crops and the effect of continuing civil conflicts. The most affected in Asia are Afghanistan, Sri Lanka, Jordan, Mongolia, Nepal, Pakistan, Syria and Yemen. In Africa, Angola, Ghana, Namibia, Eritrea, Sudan, Mozambique, Swaziland and Zimbabwe could face substantial declines in per caput cereal food consumption. The impact of such declines on food security in these countries will be determined by how much of other locally produced and/or imported foods can be substituted for cereals to maintain nutritional levels. Low international cereal prices are expected to ease some of the financial burden on these countries, which must import food to meet domestic needs. The cereal food prospects are expected to be better in Latin America and the Caribbean where crop conditions were generally favourable in 1999.

Feed demand to recover, but only slightly

World feed utilization of cereals in 1999/2000 is forecast to increase modestly to 656 million tonnes after falling by about 1 percent in the previous season. Total feed use of cereals is officially forecast to rise about 1 percent in the United States, to 165 million tonnes, due to expected larger inventories of beef and dairy cattle and poultry. Significant gains are expected in South America, in particular Brazil as its poultry export industry is likely to continue to expand. By contrast, lower cattle inventories and slower than expected hog production could reduce barley feeding in Canada and lead to an overall slight decline in total cereal feed use this season. For the first time in seven years, the downward trend in cereal feed use in the Russian Federation is forecast to reverse in 1999/2000, helped by an expected reduction in meat imports and in spite of a likely decrease in coarse grain feeding. The decline in coarse grains would be more than offset by increased wheat feeding encouraged by higher production in 1999, a rise in imports, and lower wheat prices relative to other grains. In the EC, feed use of cereals is expected to remain close to the previous year's level, while some countries in eastern Europe may reduce cereal feeding in view of smaller domestic supplies.

With the resumption of economic growth in several Asian economies, aggregate feed use is forecast to recover slowly in 1999/2000, pointing to the first significant expansion since the beginning of the financial crisis some 3 years ago. In the five Asian countries hardest hit by the financial crisis (Indonesia, the Republic of Korea, Malaysia, the Philippines and Thailand), cereals used in livestock feed are anticipated to increase by 6 percent this year, buoyed by low grain prices as well as economic recovery. Among other developing countries, feed use of cereals in 1999/2000 is forecast to be largely unchanged from the previous year.

"Other uses" of cereals expected to be down

Other uses of cereals, comprising seeds, industrial uses and post-harvest losses, are forecast to continue to contract on a global basis since their peak in 1997/98, largely due to lower post-harvest losses, especially among the developing countries. By contrast, industrial uses of cereals in some developed countries could expand this season to meet growing domestic demand. In the United States, according to the official sources, industrial uses of maize in 1999/2000 are forecast to rise in aggregate about 3 percent compared to the previous year, especially for High Fructose Corn Syrup, starch and alcohol for ethanol production.

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