The cereal import bill of the world’s poorest countries
is forecast to rise by 56 percent in 2007/2008. This comes after
a significant increase of 37 percent in 2006/2007, FAO said today.
For low-income food-deficit countries in Africa, the cereal
bill is projected to increase by 74 percent, according to the UN
agency’s latest Crop
Prospects and Food Situation report.
The increase is due to the sharp rise in international cereal prices,
freight rates and oil prices.
International cereal prices have continued to rise sharply over
the past two months, reflecting steady demand and depleted world
reserves, the report said. Prices of rice increased the most following
the imposition of new export restrictions by major exporting countries.
By the end of March prices of wheat and rice were about double
their levels of a year earlier, while those of maize were more
than one-third higher, according to the report.
FAO has launched an Initiative on Soaring Food Prices (ISFP),
offering technical and policy assistance to poor countries affected
by high food prices in order to assist vulnerable farmers to increase
local food production. Field activities are starting in Burkina
Faso, Mauritania, Mozambique and Senegal. FAO will also help governments
prepare actions and strategies to increase agricultural production.
In collaboration with the World Food Programme, IFAD and other
partners, FAO will establish a food market information unit to
pull together and analyze various data sources at local, national
and international levels and to disseminate this information. FAO
has allocated US$17 million for these activities.
Domestic food prices spur social unrest
Prices of bread, rice, maize products, milk, oil, soybeans and
others basic foods have increased sharply in recent months in a
number of developing countries, despite policy measures -- including
export restrictions, subsidies, tariff reductions and price controls
-- taken by governments of both cereal importing and exporting
countries to limit the impact of international prices on domestic
Food riots have been reported in Egypt, Cameroon, Cote d’Ivoire,
Senegal, Burkina Faso, Ethiopia, Indonesia, Madagascar, the Philippines
and Haiti in the past month. In Pakistan and Thailand, army troops
have been deployed to avoid seizing of food from the fields and
“Food price inflation hits the poor hardest, as the share
of food in their total expenditures is much higher than that of
wealthier populations,” said Henri Josserand of FAO’s
Global Information and Early Warning system. “Food represents
about 10-20 percent of consumer spending in industrialized nations,
but as much as 60-80 percent in developing countries, many of which
2008 forecast: production up
According to FAO’s first forecast world cereal production
in 2008 is to increase by 2.6 percent to a record 2 164 million
tonnes. The bulk of the increase is expected in wheat, following
significant expansion in plantings in major producing countries.
“Should the expected growth in 2008 production materialize,
the current tight global cereal supply situation could ease in
the new 2008/09 season,” the report said.
But much will depend on the weather, FAO cautioned, recalling
that at this time last year prospects for cereal production in
2007 were far better than the eventual outcome. Unfavourable climatic
conditions devastated crops in Australia and reduced harvests in
many other countries, particularly in Europe.
“Favourable climatic conditions will be even more critical
in the new season because world cereal reserves are depleted,” the
According to FAO’s forecast, world cereal stocks are expected
to fall to a 25-year-low of 405 million tonnes in 2007/08, down
21 million tonnes, or 5 percent, from their already reduced level
of the previous year.
“Any major shortfalls resulting from unfavourable weather,
particularly in exporting countries, would prolong the current
tight market situation; contribute to more price rallies and exacerbate
the economic hardship already facing many countries,” the
FAO urges all donors and International Financing Institutions
to increase their assistance or consider reprogramming part of
their ongoing aid in countries negatively affected by high food
prices. A tentative estimation of the additional funding required
by the governments to implement country projects and programmes
for dealing with soaring food prices ranges between US$ 1,2 and
1,7 billion. The release of these funds can provide important support
for poor farmers, including access to inputs and assets, to enhance
the food supply response in the next agricultural seasons.
Worldwide, 37 countries are currently facing food crises, according
to the report. Click here for the complete list of countries in
need of external assistance.
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