The global cereal supply and demand situation has further tightened,
downward revision of the 2006 world cereal production forecast and a
increase in cereal utilization in 2006/07. At current forecast levels,
the utilization would exceed production by 3.3 percent in 2006/07. World
cereal stocks are forecast to decline for the third consecutive year,
with those of wheat falling to their lowest level since 1981.
Cereal export prices have increased sharply in recent months, mainly
to tightening world supplies and by November 2006 were well above their
levels of a
year earlier. Because of higher prices, the cereal import bill of the
Low-Income Food-Deficit Countries (LIFDCs) is forecast to increase by
15 percent in 2006/07.
However, higher prices are also encouraging larger plantings of
Wheat planting has been completed in the main producing regions and
early prospects are favourable, with increased areas reported and satisfactory
weather conditions so far.
Severe floods in the Horn of Africa in the past weeks have adversely
affected up to 1.8 million people in Kenya, Ethiopia and, in particular,
Hundreds of thousands of people are urgently in need of humanitarian
assistance. Despite the flooding, overall prospects for the 2006 cereal
crops, now being harvested,
in Eastern Africa remain favourable.
In the developing countries, the 2006 cereal production has increased,
projected to increase in almost all regions of the world, in particular
Africa and Asia.
As a result of the improved supplies in Africa, per caput cereal consumption
to rise in the 2006/07 marketing year.
Following bumper harvests and ample cereal supplies in countries
of Western Africa and Southern Africa, and in order to support domestic
prices, donors are encouraged
to undertake local purchases and triangular transactions for their on-going
food aid distribution programmes.