Rome, Italy
October 5, 2007
Cereal import bill for world’s
poorest countries forecast up 14 percent from last year’s
already high level
International wheat prices have increased sharply since June,
hitting record highs in September in response to tightening
world supplies, historically low levels of stocks and sustained
demand, according to FAO’s
latest Crop Prospects and Food Situation report, issued today.
The combination of higher export prices and soaring freight
rates is pushing up domestic prices of bread and other basic
food in importing developing countries, hitting the group of
Low-Income Food-Deficit countries (LIFDCs) particularly hard and
causing social unrest in some areas, the report said.
The total cereal import bill of the LIFDCs is forecast to
increase considerably for the second consecutive year, reaching
an all-time high of US$28 billion in 2007/08, up roughly 14
percent from last year’s already high level. Overall, developing
countries are likely to spend a record US$52 billion on cereal
imports, according to the report.
Maize prices are also well above last year’s levels, despite the
bumper crop materializing this year, mainly reflecting continued
strong demand from the biofuel industry, the report said.
In the United States, the world’s largest producer of maize,
output is forecast to increase 26 percent from 2006 to an
all-time high. According to the report, record maize harvests
are also expected in South America, with production in Brazil
increasing by one-quarter from last year’s good level, and in
Mexico, the largest producer in Central America.
Cereal stocks – particularly wheat – at historic lows
“On current indications, this year’s cereal harvest would only
just meet expected utilization levels in the coming year, which
means that stocks will not be replenished,” said Paul Racionzer
from FAO’s Global Information and Early Warning System. “We
anticipate cereal stocks to remain at very low levels for the
foreseeable future.”
The report calls the situation of wheat stocks “worrying”.
Sustained demand amid insufficient increase in production this
year, especially among the major exporting countries, which are
also among the leading stock holders, is expected to result in
at least a 14 million tonne drawdown of world inventories to 143
million tonnes, the lowest in 25 years.
Floods cause localized losses, but rains benefit crop
prospects overall
Severe floods in recent months in Asia and Western and Eastern
Africa resulted in loss of life, population displacement and
damage to infrastructure, adversely affecting the livelihood of
millions of people. However, in spite of serious localized crop
losses, the abundant rains benefited developing crops and
overall prospects for the 2007 cereal harvests are favourable in
these regions, the report said.
In the Caribbean, an active 2007 hurricane season resulted in
infrastructure damage and severe losses of food and cash crops
in countries throughout the region.
According to the report, 36 countries worldwide are currently
facing food crises. For the complete list of countries in need
of assistance,
click here.
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