Regional reviews

Africa

North Africa

In North Africa, early prospects for the 2009 winter wheat and coarse grain crops, to be harvested from around June, remain favourable, except in Tunisia where dry conditions have delayed plantings in most producing areas pointing to another below-average crop in spite of measures taken by the Government to improve production. In Morocco, cereal production is expected to recover further in 2009 due to abundant and widespread rains since the beginning of the cropping season as well as an estimated 9.5 percent increase in area planted. In Egypt, the largest producer in the subregion, where most crops are irrigated, weather conditions were also reported to be generally satisfactory and average to above-average cereal output is expected in 2009.

The subregion’s 2008 wheat crop was estimated at 15.8 million tonnes, 18 percent up from the previous year's drought-reduced level, while production of coarse grains (winter and spring) increased by 3 percent to about 11.2 million tonnes. The increase in cereal production in 2008 combined with a significant decline in international commodity prices has been favourable in helping to reduce inflation slightly and improve somewhat access to food. In Egypt, the most affected country, where the year-on-year rate of inflation in urban areas reached 23.6 percent in August 2008 (up from 6.9 percent in December 2007), a downward movement was observed from September with inflation dropping to 20.3 in November. Inflation is driven mainly by price changes in the food sector where the year-on-year rate of inflation dropped from 30.9 percent in August 2008 to 26.4 in November.

 

Western Africa

In Western Africa, there is little agricultural activity in this period of the year, except for limited cultivation of recession or off-season crops, for which prospects are generally favourable.

Above-average to record cereal harvests were gathered in most countries of the subregion in 2008. Nevertheless, the food outlook for 2009 remains uncertain, due to several factors including the very low cereal carry-over stocks at the beginning of the marketing year due to previous year’s reduced crop and the high dependence of several countries on imported cereals. Although coarse grains prices have declined significantly across the subregion since the beginning of harvests in September, by December 2008 they remained well above the levels of a year ago and an upward movement was even observed in some countries in early January. For example, despite significant decreases in recent months, millet prices in markets of Mali (Bamako), Burkina Faso (Ouagadougou) and Niger (Niamey) were 9, 25 and 41 percent respectively higher than in January 2008. The situation is worse for rice prices, which are determined by world prices and have exhibited high pass-through from the international market. In Senegal, Niger and Burkina Faso rice prices continued to increase, being 81 percent higher in Senegal in November and 50 and 60 percent respectively higher in Niger and Burkina Faso in January 2009 than a year earlier. These increases occurred despite a series of measures implemented by governments aimed at offsetting the impact of higher world prices, including waiving of import tariffs and food distributions. In most francophone countries of Western Africa no impact was observed on prices due to the relatively low initial tariff level and the recent depreciation of the CFA (which is pegged to the Euro) against the US dollar. By contrast, the Nigerian Government reduced import duty on imported rice from 100 to 2.7 percent for 6 months, up to 31 October 2008, targeting the importation of not less than 500 000 tonnes of milled rice. A significant price decline was observed in markets in Nigeria between May and September 2008 (for example 16 percent in Bodija market, Ibadan) due to the initial level of the tariff and the appreciation of the Naira. However, the Naira has depreciated steeply in recent weeks losing 20 percent of its value between late November and late December reflecting the impact of falling oil prices on the economy. This is likely to translate into a rise in the price of imported goods including cereals.

In Liberia, harvesting of rice is nearly complete. Harvesting of cassava, another major staple crop, has just started. Yields and production are seriously threatened by the recent outbreak of a caterpillar pest in northern parts, which may spread into neighbouring countries, adversely affecting the subregion’s food security. The situation needs to be closely monitored in the coming weeks.

Central Africa

In Cameroon and the Central African Republic, harvesting of the second 2008 maize crop (planted from August-September) is nearly complete in the south and overall prospects are favourable reflecting adequate rains throughout the cropping season. In the north, characterized by only one rainy season, harvesting of millet and sorghum is complete and output is forecast to be above average. However, cereal prices remained relatively high in Cameroon driven by several factors including a strong recovery of the poultry industry, which was hard hit by Avian Influenza in 2006 as well as the dependence of the country on imported rice. Moreover, in the Central African Republic agricultural recovery continues to be hampered by persistent civil unrest and inadequate availability of agricultural inputs, notably in northern parts where nearly 300 000 people have reportedly been uprooted from their homes over the past two years. Continuing insecurity in both Chad and the Darfur region of Sudan threaten to further destabilize the situation in northern parts of the country.

Eastern Africa

Increased cereal harvest in 2008 for the subregion but significant reductions in Kenya and Somalia

Harvesting of the 2008 main season cereal crops is complete in northern parts of the subregion while harvesting of secondary season crops has started in southern parts except in Ethiopia where planting is about to commence. The outlook is poor for the secondary season crops in Kenya and Somalia. By contrast, an above-average main season grain output is estimated in Ethiopia and Sudan.

The subregion’s aggregate 2008/09 cereal output (main and secondary crop seasons) is forecast at nearly 34.4 million tonnes, 5 percent higher than in the previous year and 17 percent above the average of the past five years (Figure 8).

 

 

In Ethiopia, the largest producer in the subregion, an FAO/WFP Crop and Food Supply Assessment Mission which visited the country late last year estimated a more than 7 percent increase in the 2008/09 cereal harvest compared to the previous year. By contrast, in Kenya a drop in maize and cereal production of about 20 percent is registered for the same period.

Higher import requirement in 2008/09 despite increased aggregate cereal harvest

The 2008/09 cereal import requirement for the subregion is expected to reach 5.9 million tonnes compared with 5.5 million in 2007/08 and just slightly above the average of the past five years (see Figures 10 and 11). This indicates a general move by countries to boost their stock levels in the face of global economic uncertainties. The bulk of these imports are projected to be on a commercial basis while the level of food aid remains unchanged.

Despite recent overall decline, continued concern over high cereal prices in the subregion

Throughout the region, cereal prices have weakened somewhat in the past weeks reflecting the normal seasonal response following the main crop harvests, but they remain above average levels for the time of year (Figures 12 and 13). In Kenya, the price of maize in January 2009 in the Nairobi market, quoted at USD 331 per tonne is 49 percent above the previous year. A sharp decline is registered in Ethiopia since October 2008 but the average price of maize in January 2009 was still 31 percent higher than in January 2008.

Wheat prices have also eased in the subregion but levels are still above average. In Ethiopia, the price of wheat in December 2008 decreased to USD 641 per tonne from the peak of USD 837 per tonne in October 2008. However, year on year, last December’s prices are still 52 percent higher. In Eritrea, prices for food in Asmara remain generally high. The last information from September 2008 indicates the retain price of wheat flour was USD 1 951 per tonne. This level is more than double the price prevailing a year earlier. In Sudan, wheat prices decreased from their peak levels at USD 752 in July 2008 to a low of USD 532 in October, about 30 percent decline. However, prices began rising again and in December 2008 prices registered USD 639, up 18 percent year on year.

Southern Africa

Favourable prospects for 2009 cereal crops, but output likely to be lower than last year’s record

As the 2008/09 agricultural season in Southern Africa nears the mid-point, growing conditions have generally improved throughout the subregion. The season had earlier got off to a slow start when plantings were delayed beyond the optimal planting window (late-October to early-November) by the late arrival of rains. However, good consistent rains since the second dekad of November 2008 in some parts and from mid-December in others allowed sowing to be completed. (See Figures 14 to 17 for the estimated rainfall pattern in selected provinces of selected countries.) The above-average precipitation in the past two months has also improved pastures and livestock conditions especially along the central belt of the subregion stretching from the western border of Angola-Namibia to the central part of Mozambique. As of late January, the main concerns with regard to climatic conditions are centred on the maize triangle of South Africa, mainly in Free State, where precipitation has recently been rather erratic and below average (see Figure 16). Regarding the flood situation, a recurring seasonal phenomenon, flood damage so far this year has been minimal with exception of some localized flood incidents in central Mozambique, southern Malawi, north-eastern Zimbabwe and western parts of Madagascar.

 

 

The area planted to maize this season in South Africa, the largest producer in the region is preliminarily estimated at about 2.6 million hectares, 7.3 percent lower than in the previous year, as farmers were discouraged by the declining trend of the SAFEX and international prices at planting time.

Elsewhere in the subregion, the Governments of Angola, Madagascar, Malawi and Zambia implemented timely distribution of agricultural inputs to needy beneficiaries at planting in order to support the 2008/09 season production. However, persisting high international fertilizer prices are expected to limit the use of this key input during the season, which could be a limiting factor on yields in what has otherwise been a mostly favourable season so far.

Zimbabwe remains a major exception in the subregion, where despite satisfactory weather conditions, shortages of quality seed, fertilizer, agricultural chemicals and tillage power and/or unaffordable prices for most agricultural inputs and the prospect of unprofitable maize prices come harvest time, have put severe constraint on maize cultivation.

Cereal imports continue to trickle in

The pace of cereal imports into the deficit countries of the subregion in the current marketing year (2008/09) continues to be relatively slower than that of the past two years (see Table 7), possibly due to the generally higher import prices this year, particularly for wheat and rice. Available figures by mid-January 2009, more than two-thirds into the marketing year, show that only 50 percent of import requirements of all cereals (as opposed some 56 percent the year before) have been received and/or contracted/pledged since the beginning of the marketing year in April 2008. Large quantities of required cereals are yet to be imported in Zimbabwe, Mozambique, Angola and other countries (see Figure 18). Given that the lean period has started as of January 2009, additional imports are urgently needed in order to avoid food shortages and further price hikes in local markets.

Cereal prices continue to rise in Southern African food deficit countries in spite of declining regional and international export prices

Although the price of maize in South Africa has declined since July 2008, maize prices in most food deficit countries, namely Zimbabwe, Malawi, Mozambique and Zambia, are either still rising or are stable at high levels (see Figures 19 and 20 for prices from the capital city markets). The slower pace of imports, compared to last year, especially during the current peak hunger period is a likely contributing factor to the high domestic prices in these countries.

In Madagascar prices of rice, the main staple food have been rising since the post-harvest low in May despite a bumper 2008 rice production. The January 2009 price was about 22 percent higher the level in May 2008. The situation needs to be monitored carefully in the coming weeks as the country is heading into the lean period until the next harvest in May. Any further increase of rice prices could result in a critical food situation similar to last year’s.

Asia

Far East

Uncertain outlook for the 2009 winter grain crops

In China (Mainland), the winter wheat crop, which accounts for about 95 percent of China’s annual wheat production, is still dormant. The area planted is estimated at 23.9 million hectares, well above the previous year’s already large area, mostly reflecting the continued government incentives for grain production. In order to help offset the increasing costs of production and encourage farmers to keep planting grains, the minimum purchase prices of white wheat has been raised from CNY 1 540 to CNY 1 740, red and mixed wheat from CNY 1 440 to CNY 1 660 per tonne. However, the weather conditions to date have been unfavourable in the major wheat producing regions. Severe drought is reported in Northern and Western China, where precipitation levels have been registered at 70-90 percent below normal. Some 9.5 million hectares of winter wheat (44 percent of total area planted) are reported to be seriously affected in Hebei, Shandong, Henan, Shanxi, Anhai, Shaanxi and Gansu Provinces.

 

In India, the winter wheat crop is well developed, with harvesting due to start in March-April. Plantings are estimated to have increased marginally from the previous year’s already large area to reach 28.2 million hectares. However, the post-monsoon rainfall has been generally scarce in most parts of the country, with 30 of the 36 meteorological subdivisions reporting significantly below-normal rainfall. The amount of rainfall in February will be critical for the outcome of the season.

The Government plans to review its ban on wheat exports in March after assessing the stock situation. India banned exports of the grain in 2007 to increase local supplies and prevent domestic prices from skyrocketing. However, in November, as domestic prices eased, the Government earmarked 2 million tonnes of wheat for exports to selected countries.

In contrast to the situation in China and India, crops in Pakistan have benefited from widespread winter rainfall in January. Although the 2009 wheat area, estimated at about 8.4 million hectares, is 1.3 percent down on last year’s level, it remains above the recent average and another above-average crop is in prospect.

In the Islamic Republic of Iran, crops in the western parts of the country are dormant under a protective layer of snow. In eastern parts of the country drier than-normal conditions reduced soil moisture for winter crop establishment and the condition of crops is reported to be worse than normal. The country had became self-sufficient in wheat in 2004 but the total wheat import requirement in 2008/09 (April/March) is forecast at 5 million tonnes following a drought that hit domestic production last year. Up to December 2008, about 3.4 million tonnes had reportedly been imported. In Sri Lanka, almost all districts have received well-below average rainfall in the early weeks of the current Maha season. The situation warrants close monitoring as should dry conditions continue, prospects for the 2009 cereal production could deteriorate rapidly.

Record rice output in 2008

In most rice growing countries in the subregion, the main 2008 paddy crop has already been harvested. Latest estimates put the subregion’s aggregate output in 2008 at a record 613 million tonnes, some 18 million tonnes above the previous year. The 2008 aggregate cereal output is at 1 077 million tonnes, some 2.7 percent above the previous year’s record, mainly reflecting bumper crops in China (+19.9 million tonnes), Viet Nam (+2.8 million tonnes), Indonesia (+2.7 million tonnes), and India (+2.1 million tonnes).

 

Food supply and market access difficulties persist in several countries

Despite an overall satisfactory food supply situation in the subregion, vulnerable populations in a number of countries are still affected by serious food supply difficulties. The Democratic People’s Republic of Korea continues to suffer chronic food insecurity and remains reliant on external food assistance. In Myanmar, the 2008 monsoon season rice production in the areas affected by cyclone Nargis was significantly reduced. Agricultural assistance is required for the coming summer season and the next monsoon season to help small farmers recover their production and livelihoods. In Nepal, the overall food security situation has improved following the summer crop harvests, availability of more employment opportunities and improved supply of food in markets. However, the situation is expected to deteriorate from January onwards in some hill and mountain districts where maize production in 2008 was reduced due to bad weather. Localized food insecurity is also expected in some Tarai districts where paddy crop production decreased by about 30-50 percent due to excessive rainfall and pests. In Sri Lanka, the country’s food security situation continues to be affected by the resurgence of civil conflict. Over 100 civilians have reportedly been killed and 230 000 people affected in crossfire between Tamil Tiger rebels and the military in January 2009. In the Philippines, some 71 000 families were reportedly affected by the recent flooding and high seas.

Near East

Moisture conditions for 2009 winter grains improve with late rains but high temperatures affect snow cover

Soil moisture conditions have improved for the winter grains in many parts of the subregion with the arrival of precipitation during December and January. However, some parts, especially from the eastern Mediterranean coast into northern Iraq, remain predominantly dry, although conditions are reported to be somewhat improved from last year’s drought. In Turkey, beneficial rains returned to southern and western parts of the country in mid-January, increasing irrigation reserves and providing additional soil moisture for dormant to semi-dormant winter grains. In Iraq, agro-meteorological conditions during land preparation/sowing were reported to be unfavourable for winter crop sowing due to high temperatures. In Afghanistan, prospects for the 2009 main wheat crop, to be harvested from May-June, have improved in the past month following good precipitation. By late January, significant snowfall was accumulated in most parts of the country to protect crops from the risk of winterkill and ensure good moisture supplies later in the season. Early indications point to a recovery in this year’s cereal production from the sharply reduced crop of 2008.

Poor 2008 crops led to seriously depleted cereal supplies in the current 2008/09 marketing year

In Iraq, generally unfavourable weather during the 2007/08 growing season led to drastically reduced 2008 winter grain production. The aggregate output of wheat and barley crops is estimated at 1.9 million tonnes, some 40 percent lower than the average level in 2007 and the smallest crop in recent history. In the Syrian Arab Republic, following poor and irregular rains during the growing season, the total wheat production in 2008 was estimated at 2.0 million tonnes, half the poor crop harvested the previous year and below average for the third consecutive year. As a result of inadequate pastures, herders sold their animals for 60-70 percent below the normal prices and in many areas they even exhausted their herds.

In Afghanistan, latest official estimates indicate an aggregate cereal output of 3.7 million tonnes, one-third lower than in 2007 and 25 percent below the five-year average due to severe drought. Output of wheat, the country’s main staple declined by 40 percent from the previous year’s level. As a result, the cereal import requirement in 2008/09 (July/June) is estimated at 2.3 million tonnes (mostly wheat), more than double the almost 1 million tonnes imported in 2007/08. Commercial import capacity is estimated at 1.6 million tonnes and 0.7 million tonnes need to be mobilized with outside assistance. WFP is currently providing food assistance under a protracted Post-Conflict Relief and Rehabilitation. Prices of wheat have declined in past months following substantial imports but they remain at high levels. By December 2008 the average price of wheat flour in Kandahra and Kabul was still 56 percent and 37 higher than a year earlier respectively.

In the Gaza Strip, following the recent conflict, the already precarious food security, characterized by soaring prices of basic food staples in 2008, has deteriorated. An Emergency Operation was jointly approved by FAO and WFP in January 2009 to provide food assistance to 365 000 most affected people, including social hardship cases, vulnerable groups, internally-displaced people and affected farmers over a period of 12 months.

Asian CIS

Outcome of 2008 cereal crop season mixed

A bitterly cold winter, below-normal precipitation and shortages of irrigation water adversely affected crop yields in southern parts of central Asia in 2008. The 2008 harvests were below average in Kyrgyzstan, Tajikistan and Turkmenistan. In Kazakhstan the 2008 cereal harvest is estimated at about 17 million tonnes, 3 million tonnes less than 2007s good level. Although Kazakhstan reopened its wheat exports as of 1 September, which was beneficial for neighbouring drought-affected countries needing to mobilize their wheat import needs, purchasing power, rather than supply of grains, is the limiting factor in the food security situation in this region. Uzbekistan was also affected by the drought but to a lesser extent. By contrast growing conditions in the Caucasus were mostly satisfactory in 2008 and Armenia and Azerbaijan had good harvests.

Latin America and the Caribbean

Central America and the Caribbean

Record maize crop in Mexico

The 2008 aggregate cereal output of the subregion is estimated at a record 43 million tonnes, about 2.2 million tonnes above the previous year’s already good level and some 5 million tonnes above the average of the last five years. This exceptional harvest mainly reflects a record production of the recently harvested coarse grain crops in Mexico where average yields have risen following widespread use of improved seed varieties and higher sowing density as well as abundant rains during the season. Planting of the mostly irrigated 2009 winter wheat and barley crops is underway in north-western states of Sonora and Baja California and in central states of Guanajuato and Michoacan. Official planting intentions point to above average levels of 650 000 hectares of wheat and 55 000 hectares of barley. At the same time, planting of minor 2009 winter coarse grain crops is well advanced in the states of Sinaloa, Veracruz, Tamaulipas and Chiapas and the area is expected at the same good level of 2008.

 

Elsewhere in Central America, harvesting of 2008 second season maize and bean crops is almost completed, and harvesting of 2008 third season maize and bean crops is about to start in Nicaragua, El Salvador and Honduras. Despite localized flooding and crop losses, the 2008 aggregate maize production of the subregion (excluding Mexico) is tentatively estimated at about 3.9 million tonnes, slightly above the good output of 2007. The good harvest largely reflects various governmental programmes to support local production against the rise of international food prices.

In the Caribbean, Haiti and Cuba are still recovering from the devastating sequence of hurricanes and tropical storms that affected both islands in the second half of 2008. Food assistance for a period of six months is being provided to 800 000 beneficiaries in Haiti and to about one million beneficiaries in Cuba. In Haiti, despite the good 2008 winter season maize and bean crops (harvesting of which is about to be completed) and the gradual decline in prices of main staple foods, the Coordination Nationale de la Sécurité Alimentaire (CNSA) estimates that some 3.3 million people, about one-third of total population, remain in a condition of food insecurity, especially in poor neighbourhoods of main towns and in the North-West department, the Artibonite valley and the South peninsula.

Food prices are showing a downward trend in the subregion, but their levels are often still above the average. In Guatemala, the wholesale price of maize in December 2008 has declined from the peak level reached in September 2008, but it is still about 35 percent higher than one year before. In Nicaragua, the average retail price of rice in December 2008 was 10.2 cordoba/pound, some 13 percent lower than the peak of September, but still 44 percent more on a year to year basis. A different situation is reported in Haiti where in January 2009 retail price of rice, the main staple food in local diet, was essentially the same of one year before reflecting import subsidies and the arrival of the new harvest on the market of Port-au-Prince.

South America

2008 wheat output halved by drought in Argentina

Harvesting of the 2008 winter wheat crop has been recently completed in all southern countries, and aggregate wheat production for the subregion is tentatively forecast slightly below 18 million tonnes, about 4.7 million tonnes below the average of the last five years and 23 percent less than the 2007 bumper harvest. This poor performance is essentially due to a severe drought, and reduced use of fertilizers in the largest producer of the subregion, Argentina, where the output is estimated at about 8.3 million tonnes, the lowest in the last twenty years, and virtually half the record output achieved in 2007. In some of Argentina’s key growing departments, such as Buenos Aires, Córdoba, Santa Fe and La Pampa, average yields reached only 20 quintals per hectare compared to five-year average of 26 quintals. This sharp drop in wheat production in 2008 will dramatically reduce Argentina’s exportable surplus to only 4 million tonnes, with a reduction of some 60 percent if compared to the average exports of the last five years.

By contrast, record wheat production is reported in Brazil and Uruguay, where dry weather conditions from the end of November, accelerated harvesting operations, but did not cause any significant damage to the wheat crops. The good harvest reflects favourable weather throughout the growing season and also a sharp increase in planted area (+30 percent in Brazil and +88 percent in Uruguay, compared to 2007) in response to high international prices at planting time. In marketing year 2009 (January/December), Uruguay is expected to export the unprecedented volume of 800 000 tonnes of wheat.

Early prospects unfavourable for 2009 maize crop

Planting of the important 2009 maize crop is almost complete in southern countries of the subregion. Scarce and erratic precipitation, hot temperatures and relatively high prices of inputs have delayed planting operations and in some cases prevented planting completely. In other cases, drought-damage to flowering or pollinating maize has been irreversible and farmers have already destined these crops to forage use rather than trying to harvest the grain. In Argentina, the area planted to maize is officially estimated at about 3.5 million hectares, some 16 percent less than 2008 season. Losses due to drought are reported to range between 40 and 60 percent in many producing areas and an agricultural emergency has been declared in the departments of Chaco, Entre Ríos and Santa Fe, giving farmers a six-month moratorium on tax and debt payments. In southern Brazil, monthly precipitation in December was 50 percent below normal and yields of the 2009 main maize crop are tentatively forecast at 3.8 tonnes per hectare, very far from the record average yield of 4.2 tonnes per hectare of 2008. In Paraguay and Uruguay, planting of 2009 second season zafrinha maize crop is expected to start soon if adequate precipitation arrives in time to improve soil moisture. The current drought is also negatively affecting pastures and fodder availability in southern parts of the subregion, with deaths of hundreds of thousands of animals and a drastic reduction in milk and meat productivity reported.

In Bolivia, the 2009 summer maize crop is expected to be harvested by mid March and satellite imagery shows good vegetation in the main growing areas of Santa Cruz and Cochabamba departments reflecting normal well-distributed precipitation. In Guyana, heavy and continuous rainfall since early December has resulted in flooding in several low-lying communities located on the Coastal Plain and along the Abary, Mahaica and Mahaicony rivers. Some localized losses of paddy rice are reported. In Peru, the planting of the 2009 wheat crop is well underway in the highlands of Cajamarca, Ancash and La Libertad departments (that represent about 65 percent of national production) and planting intentions point to an above-average area; in Ecuador, despite some localized floods, the abundant seasonal rains are benefiting planting of main 2009 rain-fed paddy crop in coastal provinces of Guayas, Los Rios and Manabi.

The outlook of 2009 paddy crop is mixed. Despite the drought affecting other crops, Argentina has planted some 204 000 hectares, with an expansion of about 10 percent if compared to previous year; while in Brazil harvesting is about to start in South and Centre states and early forecasts point to an output of 12.4 million tonnes, more than 2 percent up on the 2008 above average crop, essentially due to area expansion in the important state of Rio Grande do Sul that represents about 60 percent of national production. On the other hand, insufficient water for irrigation is likely to constraints plantings and production in Uruguay.

Wholesale and retail prices of rice are stabilizing in several countries, showing no changes or a minor decline since mid-2008.

North America, Europe and Oceania

North America

Winter wheat area down in the United States

The area sown to winter wheat in the United States, which normally accounts for about 70 percent of the total wheat area, is officially estimated at some 17 million hectares for the 2009 harvest, 9 percent down from the previous year. A decline in area had been expected due to lower price prospects in 2009 and the increased cost of inputs, but the official estimate was some 800 000 hectares lower than earlier tentative forecasts and lower than the average seeded area in the past five years. The condition of the crop going into the winter was rated well above the previous year’s, with 66 percent of the crop rated good to excellent, and the weather since then has been generally satisfactory, so, as of end-January there is a good possibility that winter survival rates may remain somewhat above the average as was the case last year. Based on these indications, and assuming average yields, the output of winter wheat is tentatively forecast at about 42 million tonnes, some 7 million tonnes less than last year’s well-above average level. Spring wheat plantings are also expected to decline, reflecting the expectation that other crops will be more profitable because of the drop in wheat prices since last year. However, the final area planted this spring may still depend somewhat on cereal price movements in the coming weeks, as wheat prices started rising again in January. In Canada, the bulk of the wheat is spring planted and the 2009 crop will not be sown until March-April. The wheat area is officially forecast to fall by 5 percent as, similar to the situation among the other major wheat producing countries, farmers are expected to choose crops that are likely to be more remunerative in 2009.

Europe

Winter grain plantings down in the region

The aggregate winter grain (mostly wheat) area for the 2009 harvest is estimated down from last year’s relatively high level, with most of the decrease accounted for by the CIS countries in the east of the region. In the Russian Federation and Ukraine, despite favourable autumn planting conditions, producers have responded to reduced price prospects and high production costs by reducing their plantings. In the EU, the winter wheat area is estimated just slightly down from last year’s high level. Winter weather conditions have generally been favourable throughout the region so far, with abundant soil moisture levels reported in most countries, which will be beneficial for crops as they come out of dormancy. However, the risk of winterkill remains a threat in some northern and eastern parts of the region where temperatures have been mostly mild so far and the crops are devoid of any protective snowcover should a cold spell arrive.

Oceania

Australia’s wheat crop recovered in 2008 but quality was poor in parts

The recently completed 2008 wheat harvest in Australia, which account for the bulk of the annual grain production, is officially estimated at about 20 million tonnes, a welcome rebound from the drought-reduced levels in the previous two years. However, harvesting was hampered in some parts by untimely rains, which left some nearly mature crops too long in damp conditions and led to a quality downgrading in some cases. Regarding the summer grain crop for harvest in 2009, the total area planted to grain sorghum (the major crop) is reported to be down by about 4 percent compared to the previous year as less fallow land was available for summer cropping in southern Queensland and northern New South Wales as a result of the increased area that had been put in winter crops. Assuming a return to average yields from the records achieved in the 2007/08 season, grain sorghum production in 2008-09 is forecast to decline to slightly less than 2 million tonnes.