Grain supplies for 2011 are adequate: UN

ROME - World grain prices have surged since July, but are still one third lower than the 2008 peak, while supplies for 2011 are “adequate”, the UN Food and Agricultural Organisation (FAO) said Friday.

However, 30 countries will need external assistance due to crop failures, it said.

The Rome-based FAO was reporting on the findings of an inter-government meeting convened this week to discuss the volatility that hit global cereal markets following Russia’s decision to ban wheat exports in the wake of widespread drought.

In September, wheat prices were 60 to 80 percent higher than at the beginning of the season in July.

“However, prices are still one-third below their peaks in 2008,” FAO noted with reference to the crisis which two years ago prompted world leaders to introduce emergency measures aimed at making food more affordable and accessible.

In the same July-September 2010 period, the price of maize increased by about 40 percent, while that of rice by “only” seven percent, FAO said.

The UN agency’s latest forecast indicates 2010 global cereal production total of about 2.239 billion tonnes - only one percent lower than last year and still the third largest crop on record.

At the current forecast level, 2010 cereal production, coupled with large carry-over stocks, “should be adequate” to cover projected world cereal utilization in 2010-11, FAO said.

In developing countries, the outlook for the 2010 cereal crops is “generally favourable,” FAO said.

Good harvests are anticipated in Eastern and Western Africa, despite serious floods in parts while in Southern Africa, an above-average cereal crop was gathered earlier in the year.

However, severe drought sharply reduced production in North Africa, particularly in Tunisia and Morocco.

In Asia, record cereals crops are anticipated in China and India, but the devastating floods in Pakistan have damaged rice crops, while dry weather is threatening production in Cambodia and Laos.

In Latin America and the Caribbean, a recovery in production from last year’s reduced level is anticipated, FAO said.

While increased domestic production has allowed poorer countries - defined by FAO as Low-Income Food-Deficit Countries (LIFDC) - to reduce imports in 2010-11, the total costs for such imports is forecast to increase, as a result of higher international cereal prices, FAO noted.

FAO’s latest estimates indicate that 30 countries around the world are in need of external assistance as a result of crop failures, conflict or insecurity, natural disasters, and high domestic food prices.

Among these is Pakistan where severe flooding has affected some 20.6 million people causing damage to housing, infrastructure and crops.

But in particular, the food and nutrition situation “remains critical” in parts of the Sahel - the area in Africa just below the Sahara Desert, FAO said.

Twenty-one of the countries that require food aid are in Africa.

In most of these, the food production-supply situation since FAO issued it last report in May is stable, such as in Mauritania, Zimbabwe and Niger which have been categorised as countries with “exceptional” shortfalls.

In several others, where widespread lack of access to food has been recorded, the situation has improved, including Eritrea, Somalia, Ethiopia and Burundi. However, two new entries have been included in the grouping: Malawi and Mozambique.

The eight countries in Asia requiring food aid include Iraq - where the ongoing civil strife is causing an exceptional shortfall - North Korea and Mongolia.

Severe localised food shortages have been registered for Afghanistan, due to conflict and insecurity and Kyrgyzstan, due to social unrest.

Poor market access and transportation difficulties continue to cause pockets of food shortages in Nepal while in Yemen problems in production persist due to the recent conflict which has left 300,000 people in refugee camps.

Only one country in the Latin American and Caribbean region expected to require food aid is Haiti, where food insecurity levels remain higher that those prior to January’s earthquake.