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

Continuous high food prices in LIFDCs remains a concern for food security

Despite the decline in international cereal export prices from their peaks in the first half of 2008, an improved 2008 cereal production and policies responses by governments, food prices have remained at high levels in many developing and low-income food-deficit countries. In many cases, domestic prices are still higher than a year ago and where they have declined, price reductions have been relatively much less than those in the international markets (see box).

Persistent high food prices in LIFDCs continue to affect access to food of large numbers of low-income groups of population, since poorer households spend most of their income on foods, and neglect other basic needs. Most affected are the urban poor and the food-deficit farmers, as they depend on the market to access food products.

In countries of Southern Africa prices of main staple maize have increased over the past year. In Mozambique, prices of maize in USD by March 2009 were 29 higher than a year earlier. In Western Africa, after having declined with the good 2008 harvest, prices of food staple sorghum and millet have started to rise since late 2008. In Niger, prices of sorghum by February 2009 were 29 percent higher than at the same time last year; while in Senegal prices of imported rice increased 48 percent in the same period. In Eastern Africa, prices of maize in Kenya in March this year were 43 percent higher than in March 2008 and in Sudan price of food staple sorghum in February 2009 had increased 68 percent over the previous 12 months.

Prices are also above the already high levels of 2008 in LIFDCs in other regions. In Asia, in Pakistan, prices of main staple wheat were 50 percent higher in March 2009 than at the same time in 2008. In Central America, in Nicaragua, maize prices have increased 45 percent from March 2008 to March 2009 and in Guatemala by 35 percent.

FAO’s first forecast point to a slight decrease in the 2009 cereal output of LIFDCs

FAO's first forecast indicates that for the LIFDCs as a group, the 2009 cereal output could remain around the good level of 2008. The 2009 forecast is, however, highly tentative as the main season rice crop is still to be planted in Asia and the cropping seasons have not yet started in several regions of Africa and Central America.

In Asia, prospects for the 2009 wheat crop, about to be harvested, have improved with the ease of the drought situation in China and beneficial rains in February and March throughout the Near East, where last year’s cereal harvest was reduced by drought. In North Africa, prospects for the winter cereal crops, to be gathered from late June, are satisfactory in Morocco and the output is anticipated to recover after two consecutive years of below-average crops. In Southern Africa, overall prospects for the main season maize crop, being harvested, are also favourable. However, in Zimbabwe, dry weather and shortages of agricultural inputs point to another poor harvest.

Further upwards revision of 2008 cereal production

FAO's latest estimate of the 2008 aggregate cereal output in LIFDCs indicates a significant increase of 4.3 percent from the previous year's good harvest to a level of 958 million tonnes. Excluding China and India, normally accounting for one-third of the aggregate cereal output, production of the rest of LIFDCs expanded at a higher rate of 5.7 percent. This reflects good cereal crops in almost all subregions of the world, with the main exception of the Near East and some countries in Africa, notably Zimbabwe, Kenya and Somalia that were affected by drought.

Higher cereal imports in 2008/09

Total cereal imports by the LIFDCs in marketing years 2008/09 or 2009 (calendar year) are currently forecast close to 86 million tonnes, up 3.6 percent from the previous season, in spite of a significant increase in their aggregate 2008 production. Most of the increase is in Asia, particularly from large importing countries in the Near East, and from China and other countries that are replenishing their cereal stocks which were at low levels following releases in the previous season to reduce the impact of high international prices. The aggregate cereal imports of LIFDCs in Africa are forecast to remain around the level of the previous season, but they are anticipated sharply higher in Zimbabwe, Kenya and Somalia.

Declining cereal import bill

The aggregate cereal import bill for LIFDCs in 2008/09 is expected to decline this season to USD 28 billion, down 27 percent from the previous season’s all-time high of USD 38 billion. While aggregate imports in volume terms are forecast to increase, lower prices and freight rates are bringing some relief to LIFDCs considering the fact that the import bill they faced in 2007/08 had soared by 62 percent. While this year’s (2008/09) bill is less than last year, it still represents an increase of 67 percent from 2005/06 before the onset of the soaring prices.

Rate of cereal imports significantly lower than in the past seasons

Available information received in GIEWS by late March 2008, indicates that about 45 percent of the LIFDCs aggregate cereal import requirement of some 86 million tonnes in 2008/09 marketing years has been already covered. This compared with 55 percent at the same time last year. The slower pace of both commercial cereal imports and food aid this season as compare with the past two seasons, particularly in Southern Africa where the marketing year is about to finish, is one of the factors contributing to the continuing high food prices in developing and LIFDCs.

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. US$1 675 in 2005), which is in accordance with the guidelines and criteria agreed to by the CFA should be given priority in the allocation of food aid.