highlights

The outlook for 2000 cereal output has deteriorated somewhat since August due to persisting drought in several important producing countries. The latest forecasts put world production well below anticipated utilization in 2000/01 and point to a significant decline in stocks.

FAO's latest forecast for cereal production in 2000 is 1 848 million tonnes, down 1.7 percent from last year. Output of wheat is forecast at 582 million tonnes, down by 1.4 percent from the previous year while that of coarse grains, at 870 million tonnes, would be 1.5 percent smaller. The forecast for the global rice crop in 2000 is now put at 397 million tonnes (milled basis), 2.3 percent less than last year's record.

The number of people facing serious food shortages has increased, despite a decline in the number of countries affected.

World cereal trade in 2000/01 is now forecast to reach 238 million tonnes, 1 percent above the previous year's volume, reflecting stronger demand for coarse grains and rice in several countries. Wheat imports are expected to remain virtually unchanged from the previous year.

International cereal prices made some small gains since August, mostly reflecting strong import demand amid indications of lower production and prospects for a larger draw down of stocks. For wheat, the increase in higher quality categories was most pronounced.

Global cassava production and consumption are forecast to rise by 2 percent in 2000. Despite growing imports by non-EC countries, global trade in cassava products is anticipated to stagnate, reflecting a depressed demand in the EC. At the same time world prices have fallen to record low levels.

International prices for most dairy products are well above last year's levels and strong prices are expected to be maintained well into 2001. Although global milk output is expected to rise by 2 percent in 2000, surpluses in the major exporters are limited and import demand is strong.

Global sugar production is forecast to decline in 2000/01, and will be overtaken by consumption for the first time in 7 years. International sugar prices have recovered sharply since falling to fourteen-year lows in February this year, supported by increased demand in the recovering economies of the Far East and the Russian Federation amid prospects of tighter supplies.