|No.1 February 2008|
|Crop Prospects and Food Situation|
In North Africa, early prospects for the 2008 winter wheat and coarse grain crops, to be harvested from around June, are mixed. Land preparation and plantings were delayed by below-normal rains in October and November in most countries. Although precipitation arrived in December, somewhat improving soil moisture conditions, timely rains will be crucial during the next few months to allow crops to recover and avoid loss of yield potential, notably in Morocco where soil moisture reserves were seriously depleted after drought in the past season. In Egypt, the largest producer in the subregion, where most crops are irrigated, early prospects are generally favourable.
North African countries rely heavily on wheat imports from the international market to cover their consumption needs. Algeria, Morocco, Egypt and Tunisia are expected to import from 47 to 56 percent of their domestic wheat utilization in their 2007/08 marketing years (see Figure 2).
Soaring international cereal prices have pushed up domestic prices of bread and other basic food causing social unrest in most countries of the subregion. The problem was compounded in Morocco by the extremely low level of domestic production in 2007. Governments have implemented a series of measures aimed at offsetting the sharp increase in world prices, including the waiving of tariffs, price controls and subsidies. Notwithstanding the high prices, wheat imports in marketing year 2007/08 (July/June) are expected to increase by some 4 percent to 7.3 million tonnes in Egypt and more than double to 3.5 million tonnes in Morocco (due to last year poor harvest) which means significantly higher wheat import bills in these countries.
In Western Africa, there is little agricultural activity in this period, except for limited cultivation of recession or off-season crops, for which prospects are generally favourable.
The 2007 aggregate cereal production in the nine Sahelian countries was provisionally estimated to be some 12 percent higher than the average of the last five years. At national level, above-average harvests are forecast in all countries with the exception of Cape Verde and Senegal. However, in the countries along the Gulf of Guinea, coarse grain production declined significantly in northern Nigeria due to late and poorly distributed rains, and in Ghana where a long dry spell was followed by floods negatively affecting crops during the season.
Markets are highly integrated in West Africa and prices changes due to supply or demand shocks are easily transmitted among neighbouring countries. Due to the size of Nigeria’s economy and agricultural sector, a reduction in this country’s cereal production usually pushes up regional cereal prices, seriously affecting food security in neighbouring countries, notably in the eastern part of the subregion. Weather-induced price increase at regional level is being exacerbated this year by the current commodity price hike on the international market. There are currently reports of rising food prices in northern Nigeria as well as in parts of Benin, Burkina Faso, Ghana, Niger and Togo.
In the western part of the subregion including Cape Verde, Guinea Bissau, Mauritania and Senegal, food prices are driven mainly by international market trends due to the high dependence of these countries on wheat and rice imports from the international market. Senegal’s domestic production, for instance, covers only about half of the country’s cereal utilization requirements, so its rice and wheat imports amount to an average of about 900 000 tonnes per annum, from the international market. Both rural and urban consumers have been affected last year by high food prices, following a poor domestic harvest in 2006 and increasing cereal prices on the international market. Although the Government has implemented a series of measures aimed at offsetting the impact of the continuing sharp increase in world prices during this season, including subsidizing the purchase of wheat flour by 40 percent, waiving of import tariffs and price controls, another low domestic production in 2007 in the context of the tight international market is exacerbating inflationist pressure on the domestic food market, which will further erode the purchasing power of urban and rural consumers. The price of millet in Dakar in November 2007 was 30 percent higher than in November 2006. Mauritania also relies heavily on coarse grain (millet and sorghum) imports from neighbouring Senegal and Mali, and wheat imports from the international market. Consequently, food prices are a key determinant of access to food for the majority of Mauritanians. The prices of both coarse grains and wheat remained relatively high in 2007, reflecting the poor harvest in Senegal and the high price of wheat on the international market. Food prices are likely to remain high in 2008 due to another poor harvest in Senegal and the persisting high wheat prices on the international market.
The impact of high food prices will be more severe in some localized areas of the subregion, where yields were severely reduced by delayed rains or floods. In these areas populations may require assistance. A series of joint CILSS/FEWSNet/FAO/WFP post-harvest Assessment Missions will visit most West African countries in February-March 2008 to update the market and food situation in the subregion.
Planting of the first maize crop for harvest from July will begin in March in the south. In Cameroon, 2007 cereal production is estimated to be similar to the previous year’s good crop, reflecting overall favourable growing conditions, notably in the southern part of the country, although in the North production was affected in several localities by erratic rains and floods. While the overall food supply situation is expected to remain satisfactory during marketing year 2008 (January-December), vulnerable groups in areas that have experienced significant declines in production due to dry spells or floods need to be continuously monitored and assisted as necessary. In the Central African Republic, farming activities continue to be hampered by persistent insecurity with large-scale population movements both within the country and to neighbouring countries, notably in the north, where nearly 300 000 people have reportedly been uprooted from their homes over the past two years. Continuing insecurity in both Chad and the Darfur region of Sudan threaten to further destabilize the situation in northern parts of the country.
In eastern Africa, harvesting of the 2007/08 main season cereal crops is complete in northern parts of the subregion while harvesting of secondary season crops has started in southern parts except in Ethiopia where planting is about to commence. The outlook is poor for the secondary season crops in Kenya and Somalia while an above average main season grain output is forecast for Eritrea, Ethiopia, and Sudan.
The subregion’s aggregate 2007/08 cereal output is estimated at about 34.5 million tonnes, about 0.2 percent lower than in the previous year but still 20 percent above the average of the previous five years (Figure 3).
In Eritrea, harvesting of the 2007/08 main season “Kiremti” crops is over. Official estimates have not yet been provided but the outlook is generally favourable. The last few years have been characterised by generally favourable weather conditions which boosted crop production. However, even in good years, Eritrea produces only a fraction of its total food requirements and largely depends on imports. High food prices continue to affect large number of vulnerable people.
In Ethiopia, preliminary results from an FAO/WFP Crop and Food Supply Assessment Mission which visited the country late last year indicate another bumper main season grain production reflecting abundant rains during the growing season, increased use of fertilizer and improved seeds, and very low pressure from pests and diseases, together with expansion in cultivated area. This represents the fourth consecutive year of bumper harvest.
In Kenya, prospects for the secondary cropping season, for harvest from February, are also unfavourable following inadequate short rains. Northern pastoral areas of Kenya have experienced a below-normal short-rains season. In addition, while control operations are underway, locust swarms in northern Kenya also threaten pastoralists' access to pasture and browse. Some locations have experienced two consecutive failed seasons.
The important long season rains normally begin in February-March in south-eastern Kenya and intensify to the eastern and northern parts. Disruptions in land preparations and planting of seasonal crops due to continuation of current post election disturbances and displacements may cause a severe humanitarian crisis.
In Somalia, the secondary “deyr” season crop, for harvest from February, is projected to be below average. Rainfall has been below normal in central Somalia and the eastern part of the Somali region of Ethiopia. This will not allow pastures to regenerate adequately to last pastoral populations through the dry season. Some of the cropped areas close to the coast have also experienced a significantly below-normal season.
Cereal production in the main gu cropping season in southern Somalia, harvested last August, was also estimated at a poor 48 600 tonnes, representing only 31 percent of the 1995 to 2006 post-war average (PWA) and 43 percent of the previous year’s gu production.
In Sudan, the main season coarse grains harvest has just been concluded. Rainfall was above normal and availability of agricultural inputs is reported to have been normal to above normal. However, after a bumper crop in the previous year, plantings returned to more normal levels this season and output is expected to decrease slightly, although remaining well above the average for the previous five years. The targeted area for the wheat crop, for harvest from March, has been increased by about 13 percent to 347 000 hectares.
An FAO/WFP Crop and Food Security Assessment Mission which visited southern Sudan recently, has estimated cereal production in 2007 in the south to be fractionally higher than last year with higher than normal yields. However, since the anticipated increase in output will not entirely meet the requirement of the spontaneous and organized returnees, the 2008 food supply/demand position in southern Sudan is expected to show a generally deficit balance. Moreover, lack of infrastructure and of a developed trade network, will limit the movement of large quantities of cereals from some of the surplus areas to the deficit ones in Upper Nile, Jonglei, Unity, East Equatoria and Bahr el Ghazal.
In the United Republic of Tanzania, harvesting of the short rainfall “vuli” season crops in the bi-modal northern areas is about to start. In the uni-modal central and southern areas, the long rainfall “msimu” season crops, for harvest from May-June are at different stages of development. The 2006/07 coarse grains production, estimated at 4.3 million tonnes, is slightly above the previous year’s good harvest and about 10 percent above the previous five years average, due to favourable rains. This has improved cereal availability in all markets. There has also been an increase in non-cereal crop availability, mainly root crops and pulses. Recent heavy seasonal rains which began on 10 January affected thousands of people in areas including Kigoma, Rukwa Ruvuma, and parts of Pwani provinces. The situation warrants monitoring as rains continue.
In Uganda, Eastern and Northern Uganda experienced heavy rains during the three months of July, August and September 2007 that resulted in severe floods in many locations. In response and following a request from the Government of Uganda, a joint FAO/WFP Mission was fielded to assess the impact of the floods on food production and household food security in the affected areas. The target areas were to be Eastern and Northern regions.
The Mission found that excessive rains in the period July-September 2007 caused extensive flooding in certain areas of Uganda, particularly in Amuria and Katakwi districts of Teso subregion where crop losses, both pre- and post-harvest, were very high. Immediate action is required to avert impending human suffering and possible loss of life. Food prices are rising fast and are double their levels a year ago in some rural markets. The Mission noted that 312 118 people in the worst affected sub-counties received a one-month food ration during September-November 2007. The Mission recommended immediate implementation of General Food Distribution to 320 924 people living in the worst affected sub-counties until the next harvest or full market recovery. The Mission further recommended that well before the start of the next planting season in March 2008, seeds, cassava cuttings and sweet potato vines should be distributed to targeted households.
Karamoja is next in need of assistance, but not primarily because of flood damage. Here, food security problems stem mainly from prolonged insecurity, drought in 2006, a late start to the 2007 cropping season, falling livestock prices and a severe attack of honeydew on sorghum, the main staple. In the Northern region, the impact of floods on agriculture was not significant, being confined to localized low-lying swampy areas and river courses. Second season planting has been normal and long-cycle sorghum and pigeon peas planted during the first season are due for harvest in January 2008. Thus, no additional food assistance is necessary over and above the ongoing assistance to IDPs. However, certain sub-counties in Lira district, particularly those bordering Amuria in Teso, would need food assistance as an immediate measure. In the medium to longer term, the Mission recommends restocking in Teso, a nation-wide programme to improve on-farm food storage and one to improve the collection of agricultural statistics which are grossly inadequate and unreliable at present.
In Somalia, in addition to the worst main cropping “gu” season in thirteen years, disruptions in trade, displacement, high inflation and continued civil insecurity are drastically reducing household food access. The humanitarian situation, especially in the Shebelle Valley, Hiran and Mogadishu regions where households are already extremely food insecure, continues to deteriorate. Staple food prices have been rising since May 2007, and are exacerbated by disruptions of Bakara market in Mogadishu (the main market in southern Somalia), depreciation of the Somali shilling and increased fuel and transport costs.
Nutrition surveys in South Central Somalia conducted in the last two weeks of November 2007 indicate sustained critical levels of acute malnutrition in most areas, without any significant change from previous surveys conducted in the same areas. The number of people in need of humanitarian assistance has increased in the last six months from 1 million to about 2 million people. Nearly one-fifth of these people are classified in Humanitarian Emergency (HE) requiring life saving interventions while a third are in Acute Food and Livelihood Crisis (AFLC) requiring livelihood support. Further information and analysis can be accessed at: www.fsausomali.org.
In Ethiopia, conflict and insecurity since mid-June in large parts of Somali Region continue to restrict movement and cross-border trade, severely constricting the livelihoods of pastoral and agro-pastoral populations in the area. These populations are relying heavily on unsustainable consumption of milk and meat from their own livestock and on wild foods. While the Government of Ethiopia has agreed to ease restrictions and implement a joint response plan with the UN and other humanitarian agencies, delays in food aid dispatches, reduced food aid delivery points and problems with food aid targeting and the implementation of other relief efforts have allowed for very little improvement in the situation. The resumption of commercial activities remains critical to improving food security in the region. One million people in Somali Region (642 000 in restricted areas) need immediate food assistance. In addition, poor October and November rains, high cereal prices and ongoing restrictions on trade and movement in some zones continue to restrict food access for pastoral and agro-pastoral populations. Locust swarms also continue to pose a threat along the Somali region. Recent reports have asserted that locusts have migrated from Gode area of Ethiopia towards northern Kenya. However, efforts have been made to cease locust migration through the dispersion of chemical pesticides.
In Kenya, post-electoral violence has resulted in serious humanitarian situation. Hundreds of people are reported to have been killed and more than quarter of a million people displaced. Overall, up to 500 000 people are estimated to be in need of food assistance. The United Nations has authorized US$ 7 million from its Central Emergency Response Fund (CERF) to support relief efforts. This initial allocation, designed to make resources available quickly for relief operations, is expected to enable UN agencies on the ground to provide vital aid in the areas of food, health, shelter, water and sanitation to those affected by the violence. To respond to the current crisis, WFP is also drawing on stocks from its other operations in Kenya – feeding 700 000 people hit by drought and a Country Programme for 1.1 million children in 3 800 schools and an HIV/AIDS project in Nairobi and Eldoret.
In Sudan, as a result of recent escalation of violence in Darfur, insecurity, displacement and loss of livelihoods are expected to continue over the next months.
In Kenya the market price of maize, which had remained stable in recent months, fluctuated in the Nairobi market between US$199 per tonne and US$202 per tonne in the period May to September. However, prices began to increase between October and December 2007 to an average of US$211 per tonne and in the first dekad of January 2008 increased to US$ 219 per tonne. Prices reacted to the Government’s announcement of a purchase price of US$215 per tonne for the crop recently harvested. Spillover effects of higher import prices also influenced the market. Recent post election disturbances are expected to exacerbate the situation.
In the United Republic of Tanzania, wholesale food prices in all markets are higher than normal for this time of year, due to a combination of increased transport costs from rising fuel prices and a government campaign for standardization of grain weights at the farm gate. Wholesale maize prices in Dar-es-Salam - quite low in the middle of 2007 averaging US$120 per tonne - began to increase sharply since August, to reach US$306 per tonne in December 2007.
In Uganda, prices of maize that had been declining since the beginning of last year reaching their low levels of US$121 per tonne in September 2007, increased sharply and averaged at US$168 per tonne in December 2007. Recent post election disturbances in Kenya are reported to have disrupted the movements of goods and services to and from the port of Mombasa. No assessments of impact are as yet available but the food security implications can be significant.
In Ethiopia, notwithstanding the good harvest prospect, grain prices remain firm in major markets. Several factors are postulated to have resulted in this unusual behaviour in the last two to three years including, increased liquidity in the economy due to the partially cash based assistance in the safety net programs which in turn reduced in-kind food aid; the spread of the credit repayments by farmers throughout the year rather than immediately after harvest which allowed farmers to manage their sales better; budgetary support at district (Woreda) level which increased effective demand through salary payments;increased formal and informal cross-border trade in grains; local purchases by cooperatives and relief agencies; and increased overall economic activity, especially construction of roads and housing in urban areas . With the prevailing high prices, poor households are expected to find it more difficult to secure access to adequate food supplies.
In Somalia, record high food prices threaten food access for the rural poor, IDPs and urban populations. In southern Somalia, recent reports indicate that maize and sorghum prices have increased by more than 100 percent since January 2007. Rice prices in the central and northeast regions are at an all time high, having doubled since January 2007.
As the 2007/08 agricultural season in Southern Africa nears the mid-point, heavy rains were reported through much of the region from late October 2007 to mid-January 2008. Excessive rains during late December-early January caused localized but severe flooding in Mozambique, Zambia, Zimbabwe and Malawi (see Box for more details on the floods). However, despite crop damage in some of the affected areas, the abundant precipitation has generally benefited crops, particularly those planted early, and helped improve pastures and livestock conditions. Barring any disasters during the remainder of the season, good harvests are likely to be gathered later in April. No serious dry spells are reported from the region yet. However, significant rises in international prices of fuel and fertilizer are expected to limit the use of these key agricultural inputs, dampening somewhat otherwise bright harvest prospects.
The area planted to maize this season in South Africa is estimated at about 3.1 million hectares, 8 percent higher than the previous year. This mainly reflects high maize prices this year and the so far good and well distributed rainfall in the main maize growing areas (the maize triangle). A bumper crop is forecast for this season. Elsewhere in the subregion overall, input availability at planting time was normal in most countries. Large input subsidy schemes were again implemented in Zambia and Malawi, enabling farmers to use quality seed and fertilizer. This is expected to have a significant positive effect on the total maize outputs. However, in Zimbabwe, in spite of the abundant rain, shortages and high prices of key inputs such as fertilizer, seed, fuel, and tillage power, compounded by severe flooding in several districts, are expected to result in relatively low harvests.
In spite of the increase in the subregion’s aggregate production of cereals in 2007 (excluding South Africa and Mauritania), the total cereal import requirement for the 2007/08 marketing year (April/March in most cases) has been estimated at 4.1 million tonnes, including some 614 000 tonnes of food aid, some 17 percent higher than in the previous year. Zimbabwe accounts for almost a quarter of the anticipated aggregate imports, following a sharp decline in cereal output last season.
Available figures by late January 2008 show that so far only some 59 percent of the import requirement of all cereals has been received and/or contracted/pledged since the beginning of the marketing year in April 2007. So far, maize import requirement coverage and, to some extent, that of total cereals have improved this marketing year compared to the last, mainly because of the high import flow into Zimbabwe (see Table 8). Imports are likely to pick up during this last quarter characterized as the main hunger period.
Prices of main cereals this marketing year have been generally much higher than at the same period last year due to international and regional strong demand and low supplies. Current prices of maize, the most important staple foodstuff in southern Africa, except for Malawi where significant exportable surplus exists, are well above their corresponding levels a year earlier. For example, as shown in Figure 7, in South Africa, the region’s main exporting country, the price in early January 2008 (Randfontein spot), at Rand 1 859/t was 31 percent higher and in Mozambique (Maputo wholesale price) at Mtk 8.59/kg was 43 percent higher than the corresponding prices a year earlier. The April 2007 to January 2008 average price of rice, the main staple in Madagascar, has been about 20 percent higher than the average of the same period the year before.
As a result of soaring international cereal prices, combined with increases in oil prices and freight rates, the cost of imports for food importing countries in the subregion has risen sharply as shown in Table 9.
A potential impact of this on the costs of cereal imports is shown in Figure 8.
The outlook is generally favourable for the 2008 winter grain crops (mainly wheat) that were planted from September to December 2007. In China (Mainland), the winter wheat crop, which accounts for about 95 percent of China’s total wheat production, is still dormant. The area planted is estimated at 23 million hectares, marginally above last year’s already large area due to the incentive of high wheat prices and continued government support for grain production. Heavy snow coverage prevailed across the major winter wheat growing regions, beneficial as a protection from frost damage and ensuring there will be abundant soil moisture this spring. Based on the estimated area and assuming normal conditions for the remainder of the season, early tentative forecasts point to a total wheat output in 2008 of some 105 million tonnes, marginally higher than last year’s record production. In India, the winter wheat area is estimated to be similar to last year’s large area and prevailing weather conditions are favourable for crop development. Output in 2008 is expected at 75 million tonnes, close to last year’s record. Similarly, wheat prospects for 2008 wheat crop in Pakistan are also good. Current indications suggest that the 2008 output may equal last year’s record crop.
In most rice growing countries in the region, the main paddy crop has already been harvested or harvesting is nearly complete. The 2007 paddy production of the subregion is estimated at 580.9 million tonnes, 5.4 million tonnes above the record production in the previous year. Latest estimates of the 2007 aggregate cereal output in the subregion now stand at a record of 1 019 million tonnes, some 18 million tonnes above the previous year, mainly reflecting bumper crops in China, India, and Indonesia.
Despite an overall satisfactory food supply situation in the subregion, vulnerable populations in a number of countries are still affected by serious food supply difficult and/or rising market prices. In Sri Lanka, the resurgence of civil conflict and the deterioration of the security situation continue to have a severely negative impact on the country’s economy and food security, particularly in northern and eastern parts of the country. The reduction in this year’s paddy production and rising cereal import prices, especially for wheat, are also negatively impacting the vulnerable population’s food access in both urban and rural areas. In Timor-Leste, the food security situation has continued to deteriorate in the past months. The 2007 food production of the country was severely affected by adverse weather conditions and an outbreak of locusts. Thus, the country which normally depends on rice imports to meet more than 50 percent of its total consumption, has found itself facing even higher import needs at a time when world cereal market prices are exceptionally high. In addition, large numbers of IDPs are still reportedly dependent on the food aid.
In Bangladesh, losses of food production (in rice equivalent) due to last year’s cyclone and floods is estimated at some 1.23 million tonnes, with more than half million tonnes in the four most severely affected districts. The Government has estimated food aid needs at some 490 000 tonnes in the first six months of 2008. WFP is planning to distribute 19 537 tonnes in January, reaching 2.3 million beneficiaries. The early recovery period is scheduled to last for ten months, and over US$260 million has been committed for cyclone relief and recovery operations.
The Democratic People’s Republic of Korea continues to suffer chronic food shortages due to the economic constraints and affected by floods in 2007. The cereal import requirement in 2007/08 marketing year (November/October) is estimated at more than 1 million tonnes in order to maintain per caput cereal consumption close to the status quo at some 160 kg per caput. The country imported an estimated 568 000 tonnes of cereals in 2006/07 (November/October), including 353 000 tonnes food aid for vulnerable and flood-affected population.
Dry, extremely cold weather prevailed across the region in the last few weeks, although showers returned to the western half of Turkey in mid-January. A persistent ridge of high pressure north of the Black Sea maintained bitter cold weather from central Turkey into Iran. In north-western Iran, night time readings plunged to as low as -31 degrees C, with most stations between -30 and -20 degrees C. Iran’s primary winter wheat areas were protected by 8 to 30 cm or more of snow. While widespread winterkill was averted due to the snow, some winterkill is likely to have occurred in areas where wheat was exposed to the extreme cold. In Turkey, which typically experiences incursions of cold weather during the winter months, temperatures did not reach the threshold for crop damage in most growing areas. However, portions of central Turkey’s Anatolia Plateau saw night time readings as low as -27 degrees C, which coupled with a locally shallow snow cover may have caused some burn-back or pockets of winter-kill. The freezing temperatures were also severe in Israel, Iraq, Jordan and the Syrian Arab Republic.
Less hardy winter crops may have also sustained some damage in northern portions Iraq and the Syrian Arab Republic, where temperatures dropped to -11 degrees C. While most of the Middle East was dry during mid-January, some rain and mountain snow (2-20 mm liquid equivalent) boosted moisture reserves for dormant winter grains in western Turkey.
In Afghanistan, early prospects for the 2008 wheat crop are favourable following heavy snowfall in January that helped to make up for below-normal precipitation at the beginning of the season. However, more rains are still needed in north-eastern provinces. Aggregate output of cereals in 2007 is tentatively estimated at over 4.6 million tonnes, well above the relatively poor harvest of 2006 (3.9 million tonnes) but short of the bumper crop expected at the end of winter due to poor weather conditions in the spring/summer. Extreme low temperatures last month have caused human casualties and loss of livestock.
Prices of wheat, the country’s main staple, have risen significantly and by the end of December were quoted well above their average levels, mostly affecting vulnerable populations in urban areas.
Planting of 2008 winter maize crop in Mexico, accounting to about 15 percent of national production, is underway. Planting intentions point to level of about 1.2 million hectares above last year and the average levels. Harvesting is due to start from April and, if favourable weather conditions persist during the growing season, production is officially early forecast at 6.7 million tonnes, some 4 percent higher than the good output obtained in 2007. This result is partially the consequence of the economic support by the Mexican Government to producers of white corn in the state of Sinaloa.
Harvesting of the 2007 second season coarse grains and bean crops has been recently completed in the subregion. Despite some localized losses due to floods in southern Honduras and north-western Nicaragua and to cold temperatures in Guatemala’s western highlands, the subregion’s 2007 aggregate cereal output is estimated at record 40.4 million tonnes. This result is mainly due to the record maize crop production in Mexico, with estimated 23.6 million tonnes, consequence of both increased planted area and yields. In Nicaragua, the international community continues providing food assistance to poor communities of the Northern Atlantic Autonomous Region that were affected by Hurricane Felix last September. In late October and mid-December, tropical storms Noel and Olga caused heavy rainfall and severe flooding in Dominican Republic, Haiti and Cuba, with severe losses of important food and cash crops such as rice, beans, plantains, cassava and sugar cane.
Countries of the subregion are highly dependent on imports to cover their cereal consumption needs and domestic cereal prices are essentially driven by international markets and several free trade agreements. In marketing year 2007/08, the subregion’s average cereal imports/domestic utilization ratio is expected at 41 per cent (with a peak of 86 percent in Costa Rica) and, therefore, the soaring international prices are expected to substantially increase the import bill and limit the access to food of most vulnerable population.
In southern growing areas of the subregion, planting of 2008 main season maize crop has been completed by the end of last year, while harvesting is about to start in Brazil. Planted area is early forecast to be very similar to the record level of 2007, slightly above 20 million hectares. In Argentina, scarce precipitations and high temperatures since mid-December, due to “La Niña” meteorological phenomenon, have affected maize crop at flowering stage in the main producing provinces of Buenos Aires, Córdoba and La Pampa. Additional crop losses were also due to a late spring frost in November. If precipitations do not resume in the following weeks, reducing damages at least on late-planted varieties, it is likely that the initial official expectations about average yields of coarse grains need to be downward revised. At the same time, despite some brief dry spells in December, recent favourable precipitations have benefited maturing maize crop in key producing areas in Brazil, Paraguay and Uruguay. Severe floods are reported in Bolivia, affecting so far some 42 000 families, especially in the departments of Cochabamba, Santa Cruz, Chuquisaca, Beni and La Paz. While current crop losses are still to be assessed, precipitations are expected to continue in February and the food security situation of the country needs to be closely monitored; at the beginning of February, the Government was considering to declare the status of national emergency. In Andean countries, the bulk of the planting of wheat crop is underway in southern highlands of Peru and planting intentions point to above-average area; in Ecuador, planting of the main 2008 rain-fed paddy crop has been virtually completed in the main producing provinces of Guayas, Los Rios and Manabi. Heavy precipitations at the end of January have flooded coastal departments of Ecuador, especially Guayas, with damages to infrastructures and losses of about 15 000/20 000 hectares of food and cash crops such as paddy, banana, cocoa and sugar cane.
Harvesting of 2007 winter wheat crop has been completed and aggregate output is early estimated at good level of 22.3 million tonnes, 10 percent above 2006 production and 3.3 percent above the average of the past five years. It essentially shows the recovery in Brazilian wheat production that in 2006 suffered a sharp decline because of reduction in planted area following unattractive prices and adverse weather conditions along the growing season. It is reported, however, that in some areas of southern Brazil wheat quality is lower than expected due to the negative effect of abundant precipitations at the end of November.
The increase in cereal international prices is pushing up domestic prices, especially in those countries that rely more on imports to meet their consumption needs. In the Andean countries, with the exception of Bolivia, cereal imports are expected to cover between 40 and 60 per cent of the cereal needs in marketing year 2007/08, with negative consequences on the balance of payments as well as the food security of the poor. In some cases, governments have already implemented policy measures to improve food access for the most vulnerable population.
According to the latest official data released in early January, the aggregate area sown to winter wheat in the United States for harvest in 2008 has increased by 4 percent from the previous year to almost 19 million hectares. The increase was not as large as had earlier been forecast, mostly a reflection of dry weather in the southern Plains that led to an estimated 1 percent reduction of the Hard Red Winter wheat area.
Regarding the spring wheat crop that will be sown later in the year, at this stage, no significant change in the area compared to last year is foreseen. A slight increase expected in Durum plantings would probably be offset by a reduction of the non-Durum spring wheat area. Spring wheat competes with other crops that offer similar returns and may be chosen in preference because of other factors such as technical rotation. Thus, assuming an average rate of abandonment (and so far there are no indications to the contrary) the overall wheat area for harvest in 2008 could increase to 21.5 to 22 million hectares compared to 20.6 million hectares in 2007. With normal yields, this would translate to an aggregate wheat output of about 60 to 62 million tonnes, some 7 to 10 percent up from 2007.
The final official estimates of the 2007 cereal production were released in the USDA Annual Crop Report in January. Aggregate wheat output was put at 56.2 million tonnes, about 14 percent above the previous year’s level, and 3 percent above the five-year average, while aggregate coarse grains output rose to a record 351.5 million tonnes, most of which was maize (332 million tonnes).
In Canada, the bulk of the wheat is spring sown in March-April. After a significant decline in 2007, the aggregate wheat area in 2008 is expected to recover, increasing by about 10 percent. An increase in the area already sown to the minor winter wheat crop has already been registered, but the bulk of the increase is expected in the durum plantings this spring, at the expense of the other spring wheat area, which is seen to decline. Latest official estimates regarding the 2007 harvest confirmed a 20 percent decrease in wheat production while outputs of all the main coarse grains were sharply up.
In the European Union, a generally favourable planting season saw larger winter grain crops sown in most of the main producing countries. The area sown to wheat, by far the most important winter grain, is tentatively estimated to be up by about 5 percent from the previous year at some 26 million hectares, largely due to the removal of the compulsory 10 percent set-aside for 2008 crops, but also reflecting a shift to wheat from other crops such as rapeseed because of the prospect of better returns. In addition to the larger plantings, yields could also increase this year, as there is good potential for a recovery from poor levels in several countries that were affected by adverse weather last year. Among the western EU member countries, this is the case in France, Germany and the United Kingdom, while in eastern parts yield recoveries could be even larger in Hungary, Romania and Bulgaria after severe drought last year.
In the European CIS, larger winter grain plantings are estimated in the main producing countries. In the Russian Federation the winter wheat area is estimated to be up by about 7 percent but assuming a return to normal yields after last year’s bumper levels then production may actually decrease marginally compared to 2007. In Ukraine, however, where plantings are estimated to be up by 12 percent, a significant recovery in production is forecast after last year’s drought-reduced level.
The recently completed 2007 harvest of winter grains (mostly wheat and barley) in Australia, which account for the bulk of the annual grain production, was well below average for the second year in succession because of drought. Despite a good start to the season at planting time, lack of follow-up rains caused crops to gradually lose potential as the season progressed. The latest official estimate of the 2007 wheat output stands at 12.7 million tonnes, representing a small recovery from the extremely low level in 2006 but still well below the potential in a season with favourable weather such as in 2005 when the output topped 25 million tonnes.
Prospects for the minor 2008 summer cereals (mostly sorghum and maize) improved greatly in late November and December with the arrival of heavy rains in many of the main growing areas in Queensland and northern New South Wales. Latest forecasts put sorghum output at about 2 million tonnes, more than double 2007’s drought-reduced level.
The 2008 winter grains will not be sown until April or May but indications already point to the potential for a large increase in plantings. Significant amounts of land are available to come into arable production after further reductions in livestock numbers in 2007 because of drought. Although the final amount sown will hinge on weather conditions at planting time, should the current price outlook persist, farmers are expected to plant an exceptionally large area, and will be making preparations in the coming weeks with a view to this possibility.
|GIEWS||global information and early warning system on food and agriculture|