UN food agency predicts falling global cereal stocks and rising prices

World cereal stocks are down and prices could rise, according to new figures released today by the United Nations Food and Agricultural Organization (FAO).

The latest edition of FAO’s Food Outlook predicts the beginning of a much tighter supply and demand situation for cereals globally, since stocks are smaller than in the previous season, production is forecast to fall, and consumption is expected to rise.

“There is a risk that the prices will increase further as we go forward into the next season if there’s another drawdown in stocks,” Paula Fortucci, the FAO Director of Commodities and Trade Division, told UN Radio today. “It’s an important challenge for the international community to come to the help of countries in these periods of extreme crises which [are] often determined by factors outside of [their] control,” she said.

Over 30 States throughout the world which are currently experiencing severe food shortages require international assistance, FAO said. The agency pointed in particular to the emergence of a “new food crisis” in southern Africa, where two successive years of poor harvests in most countries created a situation that requires an immediate international response.

Ms. Fortucci underscored the affect this would have on the region’s poor. “Many of the populations we are speaking of are very dependent on agriculture,” she said. “If they are unable to plant at the times when planting is needed… their food availability is put in jeopardy and has very serious consequences.”

According to the report, world cereal trade in the coming season is forecast at 235 million tons, down 1 million tons from 2001-02. Global cereal consumption is forecast to reach 1,938 million tones in 2001-02, representing a 1.4 per cent increase over the previous year.

World cereal stocks by the end of the crop seasons in 2003 are forecast to fall sharply to 498 million tons, 71 million tons down from their already reduced opening level, FAO said. At the same time, international cereal prices have increased over the past two months.