Economic and Social Department

 global information and early warning system on food and agriculture

 food outlook
No. 3 Rome, June 2003

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Highlights

BASIC FACTS OF THE WORLD CEREAL SITUATION

Cereals

FOOD EMERGENCIES PERSIST IN MANY COUNTRIES

Current Production and Crop Prospects

Trade

Carryover Stocks

Large Reduction in World Cereal Stocks

Export Prices

Ocean Freight Rates

Cassava

Oilseeds, Oils and Oilmeals

Pulses

Sugar

Fertilizers

Appendix Tables

STATISTICAL NOTE

Current Production and Crop Prospects

Position by Region

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Asia

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Far East: Harvesting of the 2003 wheat crop is already underway in some parts of the region and soon to start in others. Production is expected to be down this year throughout the region. In China, the wheat area planted last autumn fell for the fifth consecutive year, largely due to policy measures to reduce wheat production and drawdown stocks built up in the late 1990s but also reflecting a shift to more profitable non-cereal crops and dry conditions in northern China. Cooler than normal spring temperatures have negatively affected wheat quality and the harvest will likely be delayed but yields are expected to be close to last year’s above-average level. The country’s wheat output in 2003 is now forecast at just over 87 million tonnes, about 5 percent below last year and 14 percent below the average of the past five years. Although overall wheat area has been dropping, the percent of high quality varieties has been significantly increased from virtually nil five years ago to more than 25 percent this year because of the Government grain policies. In India, the 2003 wheat crops is forecast has been revised upward since the last report to just over 70 million tonnes. The impact of moisture-stress on wheat production in some wheat growing states was less severe than earlier anticipated. However, at this level, output would still be 2.2 percent lower than the previous year, mostly due to the smaller area planted. The latest official forecast for Pakistan’s wheat harvest in 2003 stands at 20.6 million tonnes, nearly 5 percent up from 2002 and 5.6 percent above the average of the past 5 years, reflecting generally favourable weather earlier in the season and higher use of fertilizer. However, some recent dry summer winds in southern parts of Punjab province, which produces over 80 percent of the country’s output, are reported to have caused some significant damage to the wheat crop and the yield in this area may be reduced, which will likely lead to some downward revision of the country’s wheat forecast as the full extent of the damage becomes clear.

Planting of 2003 main season coarse grain crops is underway or about to start in the main producing countries. In India, normal monsoon rains are expected to begin at the end of May and coarse grains plantings are anticipated to rise to a record level of 6.9 million hectares. In contrast, China’s planted area for 2003 is estimated to be 5 percent lower than last year. A large reduction in maize area was partly due to the new support policy to soybeans in Northeast China and eastern Inner Mongolian, the major soybean and maize producing regions in the country. In addition, a severe drought since April has affected millions of hectares of farmland in China’s northeast producing area. Rainfall in come counties has declined by as much as 70 percent compared to last year and if the drought continues in June, this year’s maize yield will be significantly affected in these parts.

For those countries situated in the southern hemisphere and around the equatorial belt, the 2003 main paddy season is about to be concluded, but for the remainder of Asia, the season is just about to begin with the imminent arrival of the monsoon rains.

In Indonesia, harvesting of the main-season rice crop is nearing completion and planting of the secondary crop will commence thereafter. Contrasting weather extremes at the beginning of the rice season resulted in some losses to the main crop, but officials are still forecasting overall 2003 paddy production in the order of 51.4 million tonnes, matching the previous season’s output. Reflecting excellent growing conditions that have boosted yields, paddy output in Malaysia is forecast to increase by 15 percent to a record of 2.4 million tonnes in 2003. Similarly, a bumper Maha paddy crop was recently harvested in Sri Lanka. However, reports of severe flooding problems in May have dampened the prospects for the second Yala crop just planted. The aggregate output forecast of the two crops remains at 2.9 million tonnes, slightly above last year. In the northern hemisphere, the long-term decline in paddy output in China (mainland) shows no signs of abating, with production forecast to fall by 2 percent from 2002 to 171.1 million tonnes. The contraction, which began in 1998, has been mostly policy-induced, with early-rice and late-rice crops bearing most of the brunt of reform. However, flooding problems, which hit Southern states in May might imply further cuts in the production outlook. Output is also forecast to decline in the Chinese Province of Taiwan, reflecting drought during planting and falling domestic prices. Most other countries in the region are anticipated to harvest somewhat larger crops, after the setbacks many of them experienced last year. In Bangladesh, harvesting of the country’s last 2002 crop - the mostly irrigated ‘boro’ crop - has been completed, while planting of the first 2003 Aus crop is underway. More modest growth in output is expected this season than the exceptional 8.5 percent of last year. Nonetheless, assuming good growing conditions and continued efforts to improve the distribution and application of inputs, paddy output could reach 39.6 million tonnes, 100 000 tonnes more than in 2002.

In India, the official production estimate for 2002 has been revised down by a further 1 million tonnes since the last report, to 115.4 million tonnes. The revision follows a firmer assessment by the Indian authorities of the effects of the irregular rainfall pattern on the main Kharif and secondary Rabi crops that particularly affected the northern rice growing states. As for the new season, planting of the Karif main paddy crop will not start before the arrival of the Southwest Monsoon in June. Predictions by India’s weather office that monsoon rains could reach only 96 percent of the long-term average do not preclude some recovery in output, especially if distribution of rainfall is favourable. Thus, FAO’s provisional forecast for 2003 shows a 16 percent increase in production to 130 million tonnes, but this would still be substantially below the record harvest of 139.6 million tonnes in 2001.

The 2003 paddy outlook for Pakistan appears promising. Despite some concerns at the beginning of the season over irrigated water availabilities, ample precipitation in recent months and high domestic prices are expected to bring about a sharp expansion in rice area. Barring a recurrence of poor monsoon rains, paddy output is expected to increase by 12 percent to 7.1 million tonnes in 2003, which would mark a return to a ‘normal’ level of output in the country. In the Philippines, planting of the main season crop is likely to be concluded in June. Officials have targeted almost half of the country’s rice area with hybrid and certified seed varieties, which, along with more favourable weather conditions, could boost paddy production by 2 percent over last year’s bumper crop to 13.5 million tonnes. In Thailand, preparations for the 2003 main-season crop are underway. Officials in the country are anticipating a strong recovery in the main crop production from the previous year’s flood-hit level to 27 million tonnes, which, if materialized, would stand as a record for the country. In Viet Nam, harvesting of the country’s first 2003, winter/spring, crop - is nearing completion; while the second, summer/autumn, crop is being planted. The Lua Mua (10th month) rice crop season will only commence after the annual monsoon rains reach the country, normally in June. Despite a shift of marginal lands out of rice cultivation, particularly in the Mekong Delta region, and drought in highland and southern coastal areas, growing conditions for the first crop have been favourable. FAO’s preliminary forecast for the country’s paddy production in 2003 stands at 34.2 million tonnes, slightly above the output of last year.

As part of its ongoing policy reform aimed at expanding paddy production and exports, the Government of Myanmar has recently announced a partial liberalization of the country’s rice sector. Under a new directive, farmers are no longer required to sell a percentage of their output to authorities at below market prices. Therefore, in the absence of adverse growing conditions, paddy output in 2003 is forecast at 23.5 million tonnes, 3 percent higher than last season’s record crop.

In Japan, planting of the new season’s rice crop has started. Under the country’s rice production adjustment programme, which aims to curb rice surpluses through area cuts, output in 2003 could fall for the third consecutive year to 10.9 million tonnes.

Likewise in the Republic of Korea, production-restrictive measures to enhance the quality rather than quantity of rice produced are in force. Authorities have targeted a 5 percent rice area reduction, providing direct payments to those farmers registered under the programme. A proposal was also made to cut official procurement prices by 2 percent. If passed, this would be the first decline in support prices since their introduction. In spite of these measures, 2003 production is forecast to increase slightly over the weather-hit crop of the previous year.

World Cereal Production

 WheatCoarse grainsRice (paddy)Total
 20022003 forecast20022003 forecast20022003 forecast20022003 forecast
 ( million tonnes )
Asia255.0249.9211.5212.4524.4539.4991.0 1 001.7
Africa16.718.582.482.717.918.2116.9119.5
Central America3.33.028.529.02.32.434.134.4
South America18.021.164.372.119.819.7102.2112.9
North America59.782.2264.9305.99.69.0334.2397.1
Europe209.9185.0219.2221.23.23.3432.3409.6
Oceania9.724.67.610.31.30.418.735.3
WORLD 572.3 584.3 878.4 933.7 578.7 592.5 2 029.4 2 110.4
      (387)1/ (396)1/ (1 837)2/ (1 914)2/
Developing countries265.5267.7370.9381.9553.0568.2 1 189.4 1 217.8
Developed countries306.8316.6507.5551.825.724.2840.0892.6
Source: FAO 1/ Milled rice. 2/ Including milled rice.
Note: Totals computed from unrounded data.

Near East: Weather conditions in most countries in the region have been favourable for the 2003 cereal production. In Turkey, Syria and Jordan an average to above-average production is projected due to adequate precipitation during the growing season. Similarly, in Iraq, favourable weather conditions have resulted in good yield prospects for the cereal crops (mainly wheat), which are now being harvested. However, some damage to crops is expected to have resulted from the recent war. An FAO/WFP Crop and Food Supply Assessment Mission is planned to visit the country as soon as the security situation permits. The Islamic Republic of Iran is expected to have another good wheat crop year and wheat output is forecast at 12.5 million tonnes reflecting strong wheat prices and good rainfall in the country except in western-producing regions with dryness.

Paddy output in the region is forecast to rebound strongly in those countries that were affected by drought in the past three years, reflecting heavy precipitation that helped them reconstitute water reserves. For instance in the Islamic Republic of Iran, attractive support prices are expected to stimulate an increase in the paddy area and improve the application of inputs, which, combined, could boost production by 4 percent. Officials in Azerbaijan are anticipating a paddy crop 25 percent larger than the previous year’s harvest, boosted by good rainfall. Similarly, in Uzbekistan, the authorities are predicting paddy production in the order of 280 000 tonnes, more than 100 000 tonnes above 2002 output.

CIS in Asia: FAO forecasts the aggregate 2003 cereal harvest of the CIS countries in Asia at 26.4 million tonnes, which would be some 11 percent below the harvest last year. Of the total, wheat is forecast to account for 21.4 million tonnes, about 2.6 million tonnes less than last year’s output. The wheat harvest in Kazakhstan, the main producer in the region, is now forecast at 10.8 million tonnes compared with 12.6 million tonnes in 2002. Wheat production is also set to decline in Azerbaijan, Armenia and the Kyrgyz Republic. The main reason for the expected production declines has been the severe winter in Kazakhstan, Kyrgyzstan, Armenia and Azerbaijan as well as floods in the latter country. Aggregate output of coarse grains in the region is forecast at 4.6 million tonnes, which would be some 9 percent lower than the harvest in 2002. The decline in coarse grains output is mainly due to frost in Kazakhstan, where the barley crop was affected and is seen to decline to 1.9 million tonnes compared with 2.2 million tonnes last year. The maize harvest is forecast at about 1.5 million tonnes, which is similar to the harvest in 2002.

Africa

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Northern Africa: Normal to abundant rains have benefited planting and development of the 2003 winter crops virtually all over the subregion. Harvesting of the wheat crop has started somewhat earlier in every country under favourable weather conditions. Aggregate wheat output is tentatively forecast to be near record at 14.2 million tonnes, well above the average of 12.1 million tonnes of the past 5 years. In Algeria, production of wheat is expected to increase by more than 45 percent with respect to last year’s average crop of 1.5 million tonnes. In Tunisia output should almost triple from the 2002 drought-affected crop, when production was a low 423 000 tonnes, well below the 5-year average of 1 million tonnes. Another large increase in wheat production is anticipated in Morocco, where output should be about 4 million tonnes, compared to 3.3 million tonnes the year before and the five-year average of 2.9 million tonnes. In Egypt, production should be about 6.6 million tonnes, close to the previous year’s average level.

Production of coarse grains in the subregion is also expected to increase from last year’s about-average crop of 10.1 million tonnes to some 10.7 million tonnes. In Egypt, rice continues to be a profitable crop for producers. Although area remains subject to ceilings given constraints on water availability, these are generally not enforced. Hence, paddy production is forecast at 6 million tonnes, similar to last season’s record outcome.

Western Africa: the rainy season is starting in the south of the countries of the Sahel, allowing land preparation and planting of coarse grains. In the coastal countries along the Gulf of Guinea, the first rains were received in early March in southern parts and permitted planting of the first maize crop. In the north, recently planted coarse grains are emerging. Crop production should increase further in Sierra Leone reflecting an improved security situation, while agriculture activities remain hampered by civil disturbances in several areas in Liberia and Côte d’Ivoire.

Planting of the 2003 paddy crop is underway in several countries in western Africa, which is being supported by the timely arrival of the rainy season, but uncertainties still surround planting intentions in the region. In Nigeria, in a bid to reduce dependency on imported rice, the Government has established a national rice security taskforce, aimed at promoting the adoption of the hybrid Nerica rice in addition to other measures to boost production and to enhance rice processing and storage. Accordingly, paddy production in the country is expected to rise to 3.5 million tonnes, an increase of 4 percent over the preceding year. Similarly, in Ghana, investments in the country’s rice sector are enhancing rice self-sufficiency. Barring adverse growing conditions, production is foreseen to surpass last year’s bumper production of 280 000 tonnes.

For other countries in the subregion, the area under rice is forecast to increase in Benin, Burkina Faso and Guinea, boosting production in these countries to record levels if normal weather conditions prevail. By contrast, civil conflicts are occurring in several other rice producing countries, especially Cote D’Ivoire and Liberia which continue to disrupt rice cultivation.

Central Africa: In central Africa, planting of coarse grains is progressing satisfactorily in Cameroon. Despite recent improvements in the security situation, agriculture activities remain hampered by civil disturbances in the Republic of Congo and Central Africa Republic.

Eastern Africa: Harvesting of the 2003 wheat crop is just completed in Sudan. Output is estimated at about 309 000 tonnes, 25 percent above the previous year’s crop. In Ethiopia and Kenya, some beneficial rains in April and May have improved the rather uncertain outlook due to the de慬d rains earlier in the year. However, the rainfall situation in the next few months will determine the final outcome later in the year.

Planting of the 2003 main season coarse grains is underway or about to start in several countries in the subregion. Early prospects are uncertain due to a combination of delayed onset of rains and excessive rains and flooding in several countries of the region. Cumulative rainfall from January to April was below normal, particularly in Ethiopia, Kenya and Uganda. In Kenya, planting of the main season crops was delayed in parts due to late onset of rains which may affect yields. Furthermore, recent heavy rains and flash floods in several areas have submerged tens of thousands of hectares of agricultural land and have displaced large number of people. In Uganda, land preparation and planting of the 2003 main season coarse grains have been delayed due to below normal rains in February and March. Escalation of conflict in northern parts of the country has also continued to displace large number of people. In Somalia, despite a good start to the main “gu” rainy season in March, heavy rains in April and May, in both Somalia and in upstream Ethiopia, have caused localized flooding. However, water and pasture conditions have benefited, particularly some areas affected by earlier drought. In Ethiopia, planting of the 2003 secondary “belg” season crops has commenced in several locations following some rains in March. In Sudan and Eritrea, the planting of 2003 main season crop is due to start in June.

Southern Africa: Planting of the 2003 wheat crop is about to start and early indications point to a reduction in area. In South Africa, which accounts for over 80 percent of the subregion’s production, planting intentions point to an area of 841 000 hectares, 11 percent lower than in 2002 reflecting lower prices. In Zimbabwe, the area planted to wheat is anticipated to be reduced further from the below-average level last year as a result of land reform activities. FAO’s estimate of the subregion’s aggregate production of wheat in 2002 indicate an average output of 2.5 million tonnes.

Harvesting of the 2003 coarse grains is well advanced. Prospects for the subregion’s aggregate output are favourable. Despite a delay to the start of the rains and erratic precipitation in the first half of the season, abundant rains since mid-February generally improved crop conditions. FAO’s latest forecast points to a harvest of 16.5 million tonnes, 5 percent above last year’s level and about average. The main maize crop is put at 15.2 million tonnes, an increase of 4 percent from 2002. However, FAO’s final production forecasts will be available upon completion of the ongoing FAO/WFP Crop and Food Supply Assessments in Angola, Lesotho, Malawi, Mozambique, Swaziland, Zambia and Zimbabwe. In South Africa, the largest producer in the subregion, coarse grains output is expected at 9.7 million tonnes, 8 percent lower than last year but still around the average of the past five years. By contrast, in Zimbabwe, affected by prolonged dry weather during the season and reduced plantings due to land reform activities, the coarse grain output is forecast at 1 million tonnes. Although at this level production is substantially above the poor harvest of 2002 it remains well below average for the third consecutive year. In Zambia, following abundant rains during the season and improved input distribution, production of coarse grains increased 61 percent from the poor level of last year to 1.1 million tonnes. In Mozambique, favourable weather in the main northern and central growing areas resulted in increased coarse grain output for the third consecutive year. However, in southern provinces the crop was sharply reduced by severe dry weather. In Malawi, following overall good rains and substantial increase in input distributions, official forecast point to a coarse grain production close to 2 million tonnes. This is 27 percent higher than in 2002 and about average. In Angola, a good 2003 coarse grain crop is expected reflecting adequate precipitation during the season and higher plantings following the end of the civil war. In Namibia, the latest official forecast indicates a coarse grain crop of 119 000 tonnes, sharply above last year’s poor harvest and above average. In Lesotho and Swaziland, coarse grains outputs have recovered from the reduced harvests of the previous two years to about average levels.

The 2003 paddy season is nearing completion in southern Africa. In the subregion’s principal producing countries of Madagascar and Mozambique, disruptive weather was reported in the first quarter of the year, including flooding associated with Typhoon Fari in Madagascar. However, latest reports indicate a general rise in output in all producing areas, especially in the province of Antananarivo. As a result, FAO has raised its estimate of production for the country by 200 000 tonnes to 2.8 million tonnes. In Mozambique, precipitation from tropical cyclone Japhet, which hit southern districts early in March, might have eased the problems caused by insufficient and erratic rains in those parts of the country. Consequently, paddy production is forecast at 180 000 tonnes, slightly higher than last year’s level.

Central America and the Caribbean

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Harvesting of the 2003 irrigated wheat crop in Mexico, continues under generally dry weather conditions. Harvest is expected to be completed by end-June and output is tentatively forecast to decrease some 10 percent from the 3.3 million tonnes average of the past 5 years. The decline has been due to inadequate water reservoir levels at planting in the main producing states of Sinaloa and Sonora, enhanced by weeks of dry weather, during the development period, early in the year.

In Central America, planting of the 2003/04 coarse grain crops has started in El Salvador, Guatemala, Honduras and Nicaragua with the arrival of the first rains of the season. Average to above-average maize crops, the main cereal, were collected in 2002/03, and adequate stocks of planting seeds are reported for this year. In Mexico, normal to abundant rains are benefiting planting of the important spring/summer maize crop, currently underway, in the main producing states of Jalisco, México, Michoacán, Chiapas and Puebla. Slightly above-average plantings are intended, partly motivated by a Government price incentive programme to producers. Average yields are anticipated, provided a normal rainfall pattern persists. Planting of the sorghum crop is also underway in the main producing west central states of Guanajato, Jalisco and Michoacán (the so called “Bajío” zone). The area planted is tentatively forecast to decrease slightly from the average of the past 5 years, mainly as a result of farmers’ decision to shift their sorghum area to the more profitable maize crop. In the Caribbean, in the Dominican Republic, normal rains in April have benefited the developing 2002/03 third season coarse grain crops, currently being harvested, and planting of the 2003/04 first season maize crop. The rains have been particularly beneficial in the north, the northwest and the eastern parts of the country. Maize output collected in 2002/03 is provisionally estimated at an above-average 42 000 tonnes. In Cuba, heavy rains throughout the country are reported in April, particularly in the far eastern provinces and in the central parts of the island. Planting of the 2003 first season maize crop has started. In Haiti, normal to above-normal rains are reported over most of the country, benefiting plantings of the 2003 first maize crop to be harvested from June.

The 2003 paddy season is underway in the region, but information on planting intentions is limited. A moderate recovery is anticipated for several countries in the region, notably Costa Rica and El Salvador that endured drought in the previous season. Planting of the main crop is proceeding in the Dominican Republic under favourable weather conditions. Owing to continued Government support, the country is expected to build on last year’s record harvest of 740 000 tonnes. Similarly in Mexico, production in 2003 is forecast to recover strongly from the previous year. To arrest the long-term decline in the rice sector, the Government has targeted a 23 percent area increase for the country’s main paddy crop, providing incentives to farmers to realize the expansion.

South America

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Planting of the 2003 wheat is about to start in Argentina, where recent dry weather has helped improve soil conditions following weeks of intensive rains in some of the main producing areas. Plantings may only be a little higher than in 2002, but a significant increase in output is nevertheless expected with respect to last year, when the crop was largely reduced due to the lack of fertilizers. In Brazil, weather conditions are favouring planting of the 2003 wheat crop in the main southern producing states. Production is forecast to increase substantially with respect to 2002 crop. This would be the result of increased plantings motivated by attractive producer prices, the use of higher quality seeds and the support of the Government to the subsector in an effort to reduce the country’s dependence on wheat imports. In Chile, planting of the 2003 wheat crop has started under generally dry weather conditions. Plantings are intended to be close to last year’s slightly above-average level. In Uruguay, sowing of the 2003 wheat crop has just started under generally normal weather conditions. In the Andean countries, in Bolivia, harvesting of the summer wheat crop (planted in October/November 2002) has been completed in the main producing eastern department of Santa Cruz. Planting of the winter crop has just started under normal weather conditions. In Peru, the bulk of the sowing operations for the 2003 wheat crop have been completed. Above-average plantings, close to 2002 level, are provisionally estimated.

Harvesting of the 2003 coarse grain crop, principally maize, continues in Argentina. Heavy rains in the province of Cordoba, the largest grain producing province, as well as in Buenos Aires province disrupted harvesting operations in early May. Harvesting has resumed and some 75 percent of plantings had been harvested by mid-May. Production is tentatively forecast at about 15 million tonnes, just above the 14.7 million tonnes collected in 2002 but below the five-year average of 15.9 million tonnes. In Brazil, harvesting of the 2003 second season maize crop (“zafrihna”) is underway. The outlook is good and a bumper crop is anticipated. Maize output for 2003 (first and second season crops) is officially forecast at a record 42.5 to 42.8 million tonnes. In Chile, harvesting of this year’s maize crop is about to finish and an above-average output is expected, while, in Uruguay, harvesting has been completed and output is provisionally estimated at an average 190 000 tonnes. In the Andean countries, in Bolivia, harvesting of the 2002/03 main season maize crop has been virtually completed while planting of the second season crop is about to start. An above-average output has been collected. In Ecuador, the bulk of the harvest operations of the 2003 yellow maize crop have started while those of the white maize crop are due to start from June. Dry weather at planting and the heavy rains and flooding earlier in the year, particularly in the coastal maize growing areas, have affected the 2003 yellow maize crop and a poor output is forecast. In Peru, harvesting of the 2003 white maize crop is nearly completed and the yellow maize harvest is underway. An above-average output is provisionally forecast. In Colombia, planting of the 2003 first (main) maize crop has started. The outlook is good, provided normal weather conditions prevail, and plantings, as well as expected yields, are anticipated to increase slightly from 2002 average level. In Venezuela, planting of the 2003 maize and sorghum crops is underway. Prospects are poor largely as a consequence of lack of fertilizers and quality seeds caused by financial constraints to farmers. The situation has been worsened due to dry weather conditions in the main growing areas.

Harvesting of the main-season paddy crops is drawing to conclusion in the subregion. The official harvest forecast in Argentina, points to a 7 percent increase in output this season to 760 000 tonnes, resulting from a partial recovery in plantings. However, prospects have been hindered by the late sowing of the crop, which is likely to negatively impact yields. In Brazil, strong competition from soybeans has brought about a small contraction in rice area. Despite rising domestic rice prices during the season, less than favourable weather resulted in disruption to the crop. Accordingly, officials have lowered the forecast for 2003 rice production since the last report by 500 000 tonnes to 10.6 million tonnes, similar to last year’s outcome.

In Ecuador, irregular rainfall has hindered paddy crop development, leading to a delay in the harvest. Consequently, rice production is forecast to contract by more than 3 percent from the 2002 level. In Peru, the production outlook for the current season also points to a decline. Exceptionally low prices in the country resulted in reduced plantings. Moreover, below normal temperatures in northern parts are likely to have depressed yields. These factors could contribute to a 6 percent decline in 2003 output. Similarly, in Uruguay, yields are reported to have been adversely affected by spells of cold weather during the planting and early maturation stages of the crop. As a result, production in the country is forecast to fall to an 8-year low of 900 000 tonnes.

Prospects for the 2003 season in Venezuela have deteriorated. Economic instability, compounded by a serious drought, has lowered the paddy forecast for the country to 550 000 tonnes, which, as well as being 14 percent below last season’s outcome, would stand as the lowest production level since 1990. Harvesting of the 2003 main paddy crop is underway in Guyana. Despite a prolonged dry spell and a pest outbreak during the growing season, estimated larger plantings are expected to give rise to an output of 490 000 tonnes, about 10 percent higher than the previous year. The 2003 paddy outlook for Colombia likewise appears promising. Improved access to credit and higher profitability in the rice sector could lead to a record output in the new season.

North America

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In the United States, wheat production in 2003 is officially forecast to rebound strongly to 57.5 million tonnes, 31 percent up from the previous year due to gains in both area and yields. The latest survey-based forecast of winter wheat production points to a 37 percent increase from 2002 because of increased plantings, reduced abandonment, and higher yields. Also, the assumed 5-year average harvested-to-planted ratios and yields result in higher spring wheat production, despite the lower planting intentions reported in the March 31 Prospective Plantings report. Also in Canada, production is forecast to recover sharply in 2003 after a drought-reduced output in the previous year. The official March seeding intentions survey points to a marginal increase in the overall wheat area in 2003. A record winter wheat area in Ontario would more than offset the expected decrease in plantings of spring wheat in western Canada. However, the overall harvested area is expected to increase by about 25 percent due to lower abandonment, and average yields are expected to rise by 32 percent. Thus production is forecast at 24.6 million tonnes, 57 percent up from 2002.

As for wheat, the United States 2003 coarse grain production is also forecast to rebound from last year’s drought-reduced level to 278.5 million tonnes, almost 14 percent up from the previous year. Of the total, maize is forecast to account for 255.5 million tonnes, with gains in both harvested area and yields expected. Larger sorghum, barley and oats crops are also expected. In Canada, coarse grain output should also recover sharply in 2003 despite a decrease in plantings. Lower abandonment should lead to a significant increase in the harvested area compared to 2002 and improved yields are also expected. The aggregate coarse grains output is forecast at 27.4 million tonnes.

In the United States, the bulk of the 2003 paddy crop has been planted, although there have been reports of some delays in the major growing state of California. The latest USDA forecast puts production at just over 9 million tonnes, down almost 6 percent from the 2002 level, reflecting a sharp fall in long-grain plantings. The fall in the overall paddy area was mainly induced by the unattractive producer prices.

Europe

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In the EU, latest information continues to point to a reduction in wheat output in 2003 but similar outputs to the previous year for most of the coarse grains. However, much will still depend on the weather in the coming weeks. The arrival of some significant rains across northern countries in May benefited crops after previously dry conditions. FAO maintains its previous forecast for the EU aggregate wheat output at about 103 million tonnes, some 1 million tonnes less than the 2002 harvest. While a smaller harvested area this year is fairly sure, given significant planting reductions in France and Germany in particular, the two biggest producers, and reports of significant winter frost damage in several northern parts, the prospects for yields remain quite uncertain. The aggregate coarse grain crop in the EU is forecast at almost 107 million tonnes, virtually unchanged from last year.

The 2002/03 winter grain season in the CEECs has been characterized by delayed planting because of adverse weather last summer/autumn, which led to reduced winter grain areas in many countries. In addition, irregular winter weather, with sharp temperature swings has led to above-normal winterkill. Increased spring plantings may have compensated for part of the reduced winter cereal area but even the spring season as been unfavourable in parts where it arrived later than normal, thus restricting the planting window and limiting yields potential.

In Bulgaria, prospects for the winter grain crops are poor following reduced and late planting, and unfavourable winter weather, which led to higher than normal estimated levels of winterkill. Wheat production is forecast at just 2.4 million tonnes compared to 3.6 million tonnes last year. Similarly, the winter barley crop is also expected to be significantly reduced to about 520 million tonnes (2002:1109 million tones). Wheat output in Croatia could fall by about 15 percent this year to about 840 000 tonnes. In the Czech Republic, the winter grain area fell and several areas have been damaged by adverse winter weather, mainly flooding. Cereal output is expected to be somewhat below the average of recent years. In Hungary, the winter wheat area is estimated close to the previous year’s level and crops were reported to be in satisfactory condition coming out of the winter. Despite the late arrival of spring, yields may improve somewhat over last year’s drought-reduced levels and output is forecast at 4.2 million tonnes (2002: 3.9 million tonnes). However, the late onset of spring is expected to significantly affect the size of this year’s barley crop. Lengthy delays in completing spring fieldwork, in many cases beyond the latest date for sowing barley, will likely have led to a significant shift from barley to maize although final planting figures are not yet available.

In Poland, as in several other parts of the region, winter grains have suffered from the prolonged and harsh winter. Winter wheat plantings are estimated to have been down about 3 percent on the previous year and winterkill losses could be up to 5 percent of this. Increased spring wheat plantings may offset some of the reduced winter area but the overall area for harvest in 2003 is likely to be somewhat below that in 2002. Yields are also expected to be down and the wheat harvest is currently forecast at 8.4 million tonnes, compared to 9.3 million tonnes last year. Regarding coarse grains, the winter rye and barley crops are expected to be reduced for the same reasons as wheat. However, plantings of spring barley and maize are expected to increase in compensation for the lost winter grain area and attractive feed grain prices. Aggregate coarse grains output is forecast to remain close to the previous years level at about 17.1 million tonnes.

In Romania, the outlook for the 2003 winter grain crops has also deteriorated after a promising start to the season at planting time. Adverse weather during the winter has caused the forecast wheat output to be reduced from earlier expectations to 6 million tonnes. This would, nevertheless, still be well up from the previous year’s drought-reduced harvest. Although spring planting has been significantly delayed by the prolonged winter weather ample soil moisture reserves will favour development of this year’s maize crop. In Serbia and Montenegro, a delayed winter grain planting season last year and a late start to the spring season has led to an overall reduction in the expected wheat area for harvest by about 12 percent. Wheat output in 2003 is forecast at about 2 million tonnes. A slight reduction in the spring maize area is expected as a result of a shift to more industrial crops for which subsidies are available. Winter grain prospects in the Slovak Republic are similar to elsewhere in the region with a reduced output expected, but the spring planting season has been generally favourable.

In the CIS countries west of the Ural Mountains, (Belarus, Moldova, Russian Federation and Ukraine) the aggregate wheat harvest in 2003 is forecast at slightly over 49 million tonnes, sharply down by about 23 million tonnes from the harvest last year. Frost and inadequate snow cover in winter and a rather cold and late spring throughout the region, in particular in the Russian Federation and Ukraine, have contributed to the poor outlook. In the Russian Federation, more 3 million hectares of the winter grain area is estimated to have been decimated by the adverse winter conditions, while in Ukraine the winterkill is put at more than 3.7 million hectares. Furthermore, spring planting in both, the Russian Federation and Ukraine has been delayed by nearly three weeks, which will limit the possibility to increase plantings to compensate for the lost winter grain area and negatively impact on yields. FAO forecasts the wheat harvest in the Russian federation at 36.5 million tonnes, 10.5 million tonnes in Ukraine, 1.2 million tonnes in Moldova and 990 000 tonnes in Belarus.

The coarse grains harvest in the region, forecast at more than 57 million tonnes, has not been affected by winter frost. Ukraine is set to produce some 11.3 million tonnes of barley, which is about 1 million tonnes more than the bumper harvest last year. The barley harvest in the Russian Federation is estimated at 17 million tonnes and in Belarus at 1.8 million tonnes. Larger areas planted with barley, early winter planting as well as crop resistance to frost have been the main reasons behind the favourable outlook to maintain high output. Adequate soil moisture and a slight increase in area under maize, is seen to increase harvest by 1.2 million tonnes this year. The maize harvest is forecast at about 1.6 million tonnes in the Russian Federation, nearly 4.3 million tonnes in Ukraine and 840 000 tonnes in Moldova.

The 2003 paddy season is getting underway in the EU. An overall area expansion is tentatively forecast, mostly on account of larger anticipated plantings in Italy. Production is forecast to recover in those member states affected by drought last year, namely France, Portugal and Spain. Accordingly, aggregate output for the EU is currently forecast at 2.7 million tonnes, up 2.4 percent from 2002.

Oceania

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In Australia, planting of the 2003 winter wheat and coarse grain crops has started in many areas following the arrival of sufficient rains. Latest weather indications are generally in favour of a normal winter rainfall season given that the El Niño event, which brought drought in the previous season, is finished. Early indications of farmers' planting intention point to a significant increase in the winter grain area this year to compensate for last year’s drought‑reduced production and returns. Given the satisfactory start of planting, and assuming normal weather for the remainder of the season, a wheat crop of some 24 million tonnes is forecast, close to the record in 2001. The winter coarse grain crop is also seen to rebound sharply from the previous year’s reduced level.

Gathering of the 2003 rice crop is almost complete in Australia. Officials are still anticipating a harvest of just 370 000 tonnes, down over 70 percent from the 2002 level, and one of the lowest harvests on national record. The expected contraction reflects steep reduction in water allocations, brought about by drought, which subsequently led to unprecedented area cuts.

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