FAO’s first forecast of world cereal production in 2003 is 1 895 million tonnes, 62 million tonnes up from the poor 2002 harvest and above the average of the past five years. The outputs of both wheat and coarse grains are forecast to increase by about 4 percent to 591.5 million tonnes and 908 million tonnes respectively, while the rice crop (milled basis) is anticipated to recover by 2 percent to about 395 million tonnes.
The forecast for utilization in 2002/03 has been lowered and now stands marginally below the level of the previous year. The contraction mostly reflects expectations of a reduced utilization as feed. If confirmed, this would be the first year that overall cereal consumption would depart from the rising trend prevailing since 1995. Despite the lack of growth in utilization, the drawdown in global cereal reserves necessary to bridge the gap between production and consumption in 2002/03 is expected to be huge, at almost 108 million tonnes.
Total cereal food aid shipments in 2001/02 fell to 7.4 million tonnes, 2.2 million tonnes less than in the previous season, and the smallest level since 1997/98, with the decline affecting nearly all regions.
In response to the crisis in Iraq, the UN has appealed for some US$2.2 billion, to assist the Iraqi people over a six-month period until the end of September. Of the total, US $1.3 billion would be required to cover food needs.
International prices for most cereals remain under downward pressure. Generally favourable prospects for 2003 crops have contributed to a further weakening of markets, which were already under pressure from large export availabilities in several non-traditional exporting countries.
International prices for dairy products continued their recovery during the first three months of 2003. Prices are expected to show further moderate increases, at least until mid-year.
International meat prices are expected to rise in 2003 in response to tightening meat supplies. However, developments in the market will depend greatly on the impact of trade restricting measures likely to be introduced by major importing countries.