The UN Food and Agriculture Organization (FAO) today raised its latest 2004 cereal output forecast by 29 million tonnes to 1 985 million tonnes compared to its previous projection in June 2004.

The wheat crop in Europe was much larger than had been expected before the harvest, while mostly favourable growing conditions for the major maize crop in the United States boosted global coarse grain prospects.

The revised forecast came in the September issue of Food Outlook, and, if it holds, the need for another major drawdown in global cereal stocks should be averted since world cereal utilization in 2004/05 is expected to be 1 985 million tonnes. In the past four years, cereal stocks have been declining sharply.

"This is essentially good news," says Henri Josserand, Chief of FAO's Global Information and Early Warning System. "We expect cereal production to be close to total levels of utilization. The stocks of the major cereal exporters are actually seen to increase, so this will raise the buffer available for unexpected crop failures. International prices for most cereals have fallen since June, while international cereal prices in 2004/05 should be less volatile than earlier expected."

Fears of significant crop damage from Desert Locusts

Food Outlook also contains a special section on the threat to agricultural and pastoral production posed by Desert Locust infestations in the Sahel. The formation and movement of swarms of Desert Locusts continue, and some countries have reported significant crop damage.

According to Food Outlook, a locust plague in the Sahel could have devastating effects not only on food production, but also on agricultural exports and rural incomes. In Mauritania for example, agriculture produces 20 percent of gross domestic product (GDP) and accounts for 60 percent of employment. Mauritania already faces a tight food situation due to three consecutive years of drought. With a depreciated currency, domestic food prices are also higher. Senegal, as it is, imports about half of its grain requirements. In Mali and Niger, some 80 percent of the population depend on agriculture, which generates upwards of 40 percent of the GDP. A number of country assessments by the FAO and CILSS (Comité Permanent Inter Etats de Lutte Contre La Sécheresse au Sahel) will take place in October, to measure the extent of losses in an otherwise good crop year.

Record wheat harvest expected in North Africa

North Africa avoided the potential threat from Desert locusts by undertaking large-scale control operations. The just harvested 2004 wheat crop is estimated at a record 17.3 million tonnes, up 38 percent on the average of the previous five years.

On global cereal trade, Food Outlook forecasts a sharp decline in 2004/05 to 227.6 million tonnes, mostly reflecting reduced import demand for wheat and coarse grains because of good crops in several traditional importing countries.

Sugar prices to stay high

FAO's latest forecast of world sugar output in 2003/04 stands at 141.1 million tonnes, that, says the report, is almost 5 percent down from the previous year, largely because of smaller harvests in India and China. However, global consumption in 2004 is expected to rise by nearly 3 percent to 143.1 million tonnes. As a result, high sugar prices will prevail on international markets, reflecting the continued strong growth in world sugar consumption, relative to output, and an anticipated fall in stocks worldwide.

The FAO Food Outlook is a publication of the Global Information and Early Warning System. FAO issued the September edition of Food Outlook today as the FAO Committee on World Food Security convened at the Organization's Rome Headquarters for its 30th session. The Committee is composed of FAO and United Nations member governments and works to reduce global hunger and poverty. The meeting will be in session from 20-23 September.