No.2  April 2008  
   Crop Prospects and Food Situation

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Countries in crisis requiring external assistance

Food Emergencies Update

Global cereal supply and demand brief

FAO global cereal supply and demand indicators

FAO food price indices

Low-Income Food-Deficit Countries’ food situation overview

Regional reviews

Statistical appendix


Low-Income Food-Deficit Countries’1/ food situation overview

2008 aggregate cereal production of LIFDCs forecast to increase marginally for second consecutive year

FAO’s early forecast of 2008 cereal production for the 82 LIFDCs as a group points to an increase of 1 percent from 2007. This increase will be lower than the population growth for the second consecutive year, implying a further drawdown in stocks, higher imports and/or decline in per caput consumption in the 2008/09 seasons. Moreover, when China and India, normally accounting for one-third of the aggregate cereal output, are excluded, production of the rest of LIFDCs is forecast to remain virtually unchanged from last year.

In LIFDCs of southern Africa, the outlook for the 2008 cereal crops, about to be harvested is generally favourable. Production is forecast to increase from last year in most countries. However, prospects have deteriorated in Zimbabwe and southern parts of Mozambique, following dry weather in the second half of the season. In North Africa, cereal output is expected to triplicate from the 2007 drought-affected level in Morocco, while in Egypt an improved harvest is anticipated on account of larger wheat plantings. In eastern Africa, a bumper 2008 wheat crop is being gathered in Sudan, where production nevertheless covers only some 40 percent of annual consumption. In other countries of the subregion cereal crops are being planted or are about to be planted but rains are somewhat delayed.

In Far East Asia, good 2008 wheat crops are in prospect in China, India and Pakistan, but outputs will mostly be a bit lower than last year’s record levels, while the main paddy crops are still to be planted. In most Asian CIS countries, early prospects for the 2008 cereal production are favourable following larger plantings of wheat, the main crop and food staple in the subregion, but in Tajikistan the outlook is being negatively affected by delayed spring rains and locust infestations. In the Near East, the outlook for this year’s cereal production is uncertain in Afghanistan, reflecting below-normal rains and an extreme cold winter, respectively.

In Ecuador, the only LIFDC in South America, the outlook for the 2008 cereal harvest is poor following heavy rains, severe floods and crop losses in the second half of February. The Government has declared a state of emergency in the whole country and requested international assistance. Elsewhere, the 2008 main cereal seasons have not yet started in Western Africa and in Central America.

Rising cereal import costs

The LIFDCs total volume of cereal imports in 2007/08 is forecast to reach some 82 million tonnes, a marginal decline from the level of the past season. Satisfactory 2007 cereal production and significant drawing on inventories have helped most LIFDCs to keep their imports stable or even below the previous season’s levels. However, as a result of the sharp increase in international cereal prices, freight rates and oil prices, the 2007/08 aggregate cereal import bill of the LIFDCs is projected to rise by 56 percent from 2006/07, after having increased by 37 percent in the previous year. This will have a negative impact on the balance of payments and current account positions of the LIFDCs in general and in particular on those in Africa, where the aggregate cereal import bill is projected to increase by a higher 74 percent rate.

Sharp increase in domestic food prices

Soaring international cereal prices, coupled with reduced national cereal production in parts, are exacerbating food inflation in countries across the world. Despite policy measures taken by governments to mitigate the transmission of international price into domestic food markets (see box on Policy Measures), prices of bread, rice, maize products, milk, oil, soybeans and others basic foods have increased sharply in the past months in a number of developing countries. Most affected by the food price inflation are the low-income groups of population, as the share of food in their total expenditures is much higher than that of wealthier populations. Food represents about 10-20 percent of consumer spending in industrialized nations, but up to 60-80 percent in developing countries. The urban poor, together with food deficit farmers, are among the worst affected groups as they depend on the market to access food products.

In Western Africa, in Côte d’Ivoire, prices of rice in March 2008 more than doubled their levels of a year earlier. In Senegal wheat prices by February 2008 were twice the level of a year ago, while those of sorghum were up by 56 percent. In the important subregional Nigerian market of Dawanau, prices of sorghum and millet have doubled in the past five months. In Eastern Africa, in Somalia, the price of wheat flour in northern areas has almost tripled in the last year. In Sudan, prices of wheat in the capital city of Khartoum this February were 90 percent higher than a year earlier. In Uganda, prices of maize in March 2008 have risen by 65 percent from their levels of September last year. In Ethiopia, maize prices in Addis Ababa in March 2008 doubled their levels of a year ago, while those of wheat were 42 percent higher. In Southern Africa, maize prices in Mozambique (capital city of Maputo) in March were 43 percent higher than a year ago. In Asia, in the Philippines, rice prices have increased by 50 percent in the past two months. In Sri Lanka, prices of rice in March 2008 were almost twice those of a year ago, while in Bangladesh they increased by 66 percent in the same period. In CIS countries of Asia, in Tajikistan prices of bread in February were twice the levels at the same time in 2007, while in Armenia the price of wheat flour has increased by one-third in the same period. In Latin America and the Caribbean, in Haiti food prices are reported as being 50 to 100 percent higher than in the past year.

Table 4. Cereal production1 of LIFDCs ( million tonnes)
  2006 2007 2008 Change: 2008
over 2007 (%)
Africa (44 countries) 128.8 119.0 127.0 6.7
North Africa30.122.327.021.0
Eastern Africa33.933.534.52.8
Southern Africa11.812.212.63.9
Western Africa49.547.649.54.0
Central Africa3.
Asia (25 countries) 749.2 766.4 768.0 0.2
CIS in Asia13.213.513.4-0.7
Far East722.7739.2741.10.2
- China Mainland386.1389.2390.20.2
- India195.9205.6204.2-0.7
Near East13.313.613.5-0.9
(3 countries)
1.7 1.9 1.8 -2.8
(1 country)
1.6 1.7 1.7 1.3
Oceania (6 countries) 0.0 0.0 0.0 0.0
Europe (3 countries) 7.4 8.3 8.1 -2.4
Total (82 countries) 888.8 897.3 906.6 1.0
1 Includes rice in milled terms.
Note: Totals computed from unrounded data.

Serious social unrest in several countries

Social unrest and food riots, which have resulted in loss of lives in some cases, have been reported in the past month in Egypt, Cameroon, Côte d’Ivoire, Senegal, Burkina Faso, Indonesia, Madagascar and the Philippines as well as in Haiti in early April. In other countries, such as Pakistan and Thailand, troops have been deployed to avoid seizing of food from the fields and from warehouses.

Rate of cereal imports higher than last season

Available information received in GIEWS by late March 2008, indicates that about 55 percent of the LIFDC’s aggregate cereal import requirement of some 82 million tonnes in 2007/08 marketing years has been already covered. Similarly, half of the food aid needs in the amount of 4.6 million tonnes, or some 6 percent of the total import requirements, have been sourced from donors’ deliveries or pledges. The pace of both commercial cereal imports and food aid this season has been faster than in the past year, despite soaring international prices. In Southern Africa, where the 2007/08 marketing year (April/March) has just ended in most countries, latest reports indicate that some 80 percent of the import needs were sourced; but this percentage could increase in the next months due to time lag in information received. Imports have also progressed satisfactorily in LIFDCs of North Africa (Morocco and Egypt), but in Western Africa, where the marketing years will end in October 2008 (Sahel countries) and December 2008 (Coastal countries), only 11 percent of the cereal import needs have been secured.

Table 5. Cereal import position of LIFDCs ( thousand tonnes)
  2006/07 or

2007/08 or 2008
Requirements 1 Import position 2
of which
food aid
of which
food aid
Africa (44 countries) 36 012 38 525 2 364 19 824 1 324
North Africa15 76818 351 013 805 0
Eastern Africa5 3574 917 1 2071 925 649
Southern Africa2 8683 413 6152 780 482
Western Africa10 34610 142 4611 204 154
Central Africa1 6741 702 82 111 40
Asia (25 countries) 42 527 39 862 2 021 23 659 852
CIS in Asia3 7053 774 622 765 31
Far East28 68424 943 1 78415 155 691
Near East10 13811 145 1755 739 131
(3 countries)
1 653 1 533 178 865 145
(1 country)
951 1 010 20 749 0
Oceania (6 countries) 416 416 0 88 0
Europe (3 countries) 1 569 1 070 20 390 0
Total (82 countries) 83 128 82 416 4 603 45 574 2 321
1 The import requirement is the difference between utilization (food, feed, other uses, exports plus closing
stocks) and domestic availability (production plus opening stocks).
2 Estimates based on information available as of late March 2008.
Note: Totals computed from unrounded data.



Table 6. Cereal import bill in LIFDCs by region and type
(July/June, USD million)
  2002/03 2003/04 2004/05 2005/06 2006/07 2007/08
LIFDC 14 025 15 792 18 825 18 028 24 749 38 696
Africa6 5017 0888 3728 36910 29717 892
Asia7 0148 0509 7678 90013 49819 277
Latin America and Caribbean 308380407468594898
Wheat7 7628 80210 81410 58914 08322 705
Coarse grains3 2813 3003 3953 0994 5226 097
Rice2 9823 6894 6164 3406 1449 894
Source: FAO.


Measures taken by governments to limit the impact of soaring international cereal prices on food consumption

As international prices of cereals have continued to increase in February and March, governments all over the world have taken policy measures to reduce the transmission of higher international prices into domestic markets, and to protect food consumption by vulnerable populations. Recent developments since early February are listed below .

In Asia , rising food prices have prompted some of the world’s largest rice producing and exporting countries to announce ceilings and even bans on their rice exports. India banned non-basmati rice exports in late March, set the minimum export price for basmati rice at USD 1 200 per tonne, and authorized duty-free imports of rice. Viet Nam has extended a ban of rice exports until June, and announced in late March that total rice exports, eventually permitted in 2008, would be cut to 3.5 million tonnes from 4.5 million tonnes last year. In Cambodia, the Government announced on 26 March a two -month ban on rice exports and the release of rice stocks to curb rising domestic prices. China, that had introduced a series of quotas/bans on grain exports, has recently announced additional agricultural production support measures, including increases in the minimum purchase prices of wheat and rice, and agricultural inputs subsidies (see Box on China). Pakistan, which had raised duties on wheat exports, has also recently raised wheat support prices by 23 percent in an attempt to build up strategic reserves. In Indonesia, following protests over shortages of soybeans, the Government has reiterated that it will take a series of measures to stabilize food prices. In the Philippines, the Government is analyzing the reduction of rice and maize import tariffs, that stand at 50 percent and 40 percent respectively, and has encouraged the private sector to participate in importing 163 000 tonnes of rice together with the National Food Authority (NFA). The NFA is also selling its rice stocks at subsidized prices. The Government of Bangladesh is selling rice at subsidized prices in urban areas, while Thailand will release 650 000 tonnes of rice from state stocks to be sold at subsidized prices. Malaysia continues to regulate the price of rice which is subsidized and has not suffered variations in recent months, despite price hikes in international prices. The Government is planning to increase its stocks.

North Africa depends heavily on cereal imports to satisfy consumption requirements and soaring international prices have pushed up domestic prices of bread and other basic food. In Egypt, after a significant rise in wheat flour subsidies, the Government announced at the end of March a ban on rice exports from April to October 2008. Earlier in the month, it had ordered the army to bake bread for the population. In Western Africa, in Senegal, that normally imports half of its cereal consumption, the Government has subsidized the purchase of wheat flour by 40 percent, waived tariffs and imposed price controls. In Liberia, the Government recently suspended the USD 2 tax levied on a standard bag of rice. In Côte d’Ivoire, following recent social unrest in response to sharp increases in oil and milk prices, the Government has temporarily suspended import duties on essential foodstuffs. In Southern Africa, in Zambia, in spite of available export surpluses of maize in 2007/08 marketing year (May/April) the Government has reinstated the export ban which had been in place most of the previous marketing season. It has also implemented large input subsidy schemes to foster cereal production this year. In Malawi, the Government has continued with the large scheme to subsidize fertilizers and quality seed in the current agricultural season. In South Africa, the Government has announced the increase of disability and old age payments from April 2008, and adjusted the amounts paid in social grants to the poor. In Zimbabwe, the Government continues to control imports of maize, wheat and sorghum which are sold at subsidized prices. In Eastern Africa, in Ethiopia, the Government has recently cancelled the value-added and turnover taxes on food grains and flour, as well as all taxes on cooking oil, and surtax on soap. Earlier, the Government took actions to stabilize cereal prices and to increase the purchasing power of the poor, including expenditures of USD 38 million to subsidize wheat, and USD 366 million to subsidize fuel. The monthly distribution of 25 kg of wheat to 800 000 low-income urban dwellers introduced in March 2007 will be maintained, as well as distribution of edible oil and other products. The Government has also announced the import of a large quantity of sugar, wheat and cooking oil. In the United Republic of Tanzania, the Government has authorized duty-free imports of some 300 000 tonnes of maize, and banned exports of agricultural commodities.

In Latin America and the Caribbean, the Government of Mexico that had earlier removed quotas and tariffs for food imports, has made agreements with traders to increase maize imports and reduce retail food prices. It has also recently announced food production support measures and its intention to reduce fertilizers prices by a third. El Salvador, Guatemala, Nicaragua and Honduras have jointly agreed to cancel the import levy on wheat flour until the end of the year. Argentina has delayed the reopening of its wheat export registry until 21 April from the previous scheduled date of 17 March. It has introduced a new scheme of variable levies for oilseeds and grains to boost state revenue while commodity prices are soaring. As an attempt to partially offset the negative impact of this scheme on farmers’ profits, the Government is considering a 20 percent subsidy on the price of fertilizers. Brazil has removed the 10 percent import tariff on 1 million tonnes of non-Mercosur wheat until June 30. In Peru, the Government announced in late March the launching of a programme to distribute food to the poorest strata of the population. It had earlier removed the tariff on cereal imports. In Ecuador, the Government has raised the subsidy on wheat flour introduced last October from USD 10 to USD 14.3 per 50 kg. In Bolivia, tariff-free imports of rice, wheat and wheat products, maize, soybean oil and meat are authorized until the end of May, while a ban on exports of grains and meat products has been introduced.

In Europe, the Russian Federation has announced high purchase prices for grain from domestic producers and is currently selling stocks to millers, after prices of wheat reached record highs in late March, in spite of the introduction of a 40 percent export tariff at the end of January. Ukraine has announced a plan to set limits on profit margins by the food industry and traders, as part of a package of anti-inflationary measures.


1.  The Low-Income Food-Deficit (LIFDC) group of countries includes food deficit countries with per caput annual income below the level used by the World Bank to determine eligibility for IDA assistance (i.e. USD 1 575 in 2004), which is in accordance with the guidelines and criteria agreed to by the CFA should be given priority in the allocation of food aid.

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GIEWS   global information and early warning system on food and agriculture