Reference Date: 29-November-2023

Dry weather conditions delay planting of 2024 winter grain crops

Sowing of winter wheat and coarse grain crops usually starts in late October and continues until the end of the year, depending on soil moisture availability following the onset of seasonal rainfall in September. As of late November 2023, cumulative seasonal rainfall remained well below average: in September 2023, rainfall amounts in the cropping areas corresponded to about the one‑quarter of the long‑term average and, in October 2023, to just about one‑third of the average. The final outturn of 2024 cereal crops, to be harvested next May/June, will depend on weather conditions during the rest of the season. Current weather forecasts indicate a high probability of near‑average precipitation between November 2023 and April 2024.

Widespread drought‑induced crop failures constrained cereal production in 2023

Cereal cultivation is mostly rainfed, resulting in significant year‑on‑year variations. The irrigated wheat area represents less than 15 percent of the total wheat planted area. Compared to the previous year, wheat plantings in 2023 increased by 7 percent as some farmers decided to shift from barley to wheat due to more attractive wheat prices. Despite favourable rains at planting time, rainfall was erratic and insufficient for the rest of the season in in‑land areas. Coupled with above‑average temperatures during the critical crop development stages, severe drought conditions, not experienced in the country for over two decades, constrained crop development, leading to widespread crop failures. Consequently, 2023 cereal output was estimated at 302 000 tonnes, almost 80 percent below the average.

Despite recurring droughts in the past years, the country still aims to increase self‑sufficiency in cereal production. Policy instruments used by the government include, guaranteed farmgate prices, subsidized certified seeds, an irrigation water subsidy as well as the provision of technical assistance to farmers producing wheat on irrigated areas.

In 2023, the guaranteed farmgate prices of durum wheat increased to TDD 1 300 (USD 436), up from TDD 1 000/tonne (USD 339). The guaranteed farmgate prices of soft (common) wheat increased from TDD 800 (USD 271) to TDD 1 000/tonne (USD 336) and those of barley from TDD 690 (USD 233) to TDD 800 (USD 267). In 2023, the government purchased 225 600 tonnes of grains, compared to 700 000 tonnes in 2022.

Cereal imports to increase in 2023/24 marketing year

The country relies heavily on grain imports, even in years with good domestic production. Cereal import requirements in the 2023/24 marketing year (July/June) are forecast at 4.7 million tonnes, about 30 percent above the average import requirements of the previous year. More than half of the imported cereals is wheat.

Between 2016 and 2020, the country sourced almost 40 percent of its wheat imports from Ukraine, 7 percent from the Russian Federation and the rest from various European Union countries. In 2022/23 marketing year, following the start of the war in Ukraine in February 2022, the share of Ukrainian exports on total wheat imports declined to slightly over 15 percent. Although Black Sea countries still supplied most of the imported wheat, shipments from Canada in 2022/23 have increased and accounted for almost 20 percent of total wheat imports.

Compared to 2022, average cereal import prices in 2023 (up to September 2023) declined by 25 percent for durum wheat, 22 percent for soft (milling) wheat and 22 percent for barley.

Despite some easing, overall food price inflation remains high

The economic growth has remained stagnant despite resurgence of tourism following the COVID‑19 pandemic. In 2023, the Gross domestic product (GDP) growth was forecast to be around 1.2 percent, about half of the 2022 growth rate, curtailed by drought, external financing challenges and increasing debt repayment obligations. As some constraints are likely to ease, the 2024 GDP growth is forecast of 3 percent.

Unemployment increased from 15.3 percent in 2022 to 15.6 percent in 2023, driven mostly by limited job opportunities in the drought‑stricken agricultural sector. Unemployment remains particularly high at about 40 percent among young people (aged 15‑24).

In spite of the country’s high import dependency rate, changes in international prices of wheat products and vegetable oil are not fully transmitted into domestic prices as the government’s universal food subsidy programme keeps them stable. There have been discussions about reforming the subsidy system, which puts a significant burden on the national budget, but the implementation has been postponed so far. Tight external financing conditions constrained the availability of foreign currency to finance imports, resulting in reported shortages of basic products despite easing of international food commodity prices.

The general Consumer Price Index in October 2023 increased by 8.6 percent on a year‑on‑year basis, decreasing for the eighth straight month from the record high level of 10.4 percent registered in February 2023. The year‑on‑year food price inflation declined from the peak of 15.9 percent reached in May 2023 to 13.1 percent in October 2023. The main price increases in October 2023 were for coffee (+35 percent), sheep meat (+30 percent), edible oils (+28 percent) and eggs (+20 percent).

Talks with the International Monetary Fund (IMF) for a bailout package are ongoing, amidst balance of payments problems.

Disclaimer: The designations employed and the presentation of material in this information product do not imply the expression of any opinion whatsoever on the part of FAO concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries.

This brief was prepared using the following data/tools:

FAO/GIEWS Country Cereal Balance Sheet (CCBS) https://www.fao.org/giews/data-tools/en/ .

FAO/GIEWS Food Price Monitoring and Analysis (FPMA) Tool https://fpma.fao.org/ .

FAO/GIEWS Earth Observation for Crop Monitoring https://www.fao.org/giews/earthobservation/ .

Integrated Food Security Phase Classification (IPC) https://www.ipcinfo.org/