Low-Income Food-Deficit Countries^1/ food situation overview

Bumper 2007 cereal harvests in China and India but aggregate production to decline in the rest of LIFDCs

With the 2007 cereal harvests complete or near completion in all regions of the word, FAO’s latest forecast of the LIFDCs’ total output still points to a marginal growth of less than 1 percent from 2006, which follows increases of 5.1 and 3.1 percent in the previous two years. When the largest countries China and India are excluded, the aggregate production of the rest of countries declined by about 2.8 percent to 297 million tonnes. This mainly reflects a sharply reduced production in North Africa, where drought in Morocco caused a drop of 76 percent in cereal output this year, but also declines in the other African subregions, with the exception of Southern Africa where an aggregate bumper cereal crop was obtained. Elsewhere, LIFDCs gathered larger harvests in 2007, particularly in Asia.

Cereal import bill goes up by over one-quarter

The aggregate cereal import requirement of the LIFDCs, as a group, in marketing year 2007/08 is estimated at 81.6 million tonnes, slightly below the level of 2006/07. Most of the decline is in Far East Asia, notably in India that is forecast to import 4.7 million tonnes less cereals than in 2006/07. By contrast, larger imports are forecast in North Africa, as Morocco is expected to increase imports this season by over 2 million tonnes. In Southern Africa, despite the good aggregate cereal harvest of this year, higher imports in 2007/08 are projected mainly reflecting requirements from Zimbabwe, where maize production declined by 43 percent from 2006. In other LIFDCs in the world, cereal imports are anticipated to remain around the levels of 2006/07. Notwithstanding the reduction in quantities to be imported, the cereal import bill of the LIFDCs is forecast to increase by 27 percent to US$31.2 millions, after having increased by 35 percent in the previous season. This reflects the prevailing high cereal export prices, as well as soaring freight rates that have doubled since last year.

Cereal food consumption to decline, vulnerable populations most affected

Higher international cereal prices have already translated into substantial rises in retail prices of basic food, such as bread, pasta, maize based products, milk and meat, in LIFDCs that depend heavily on imports to meet their consumption requirements. Most affected by the food price inflation are the low-income groups of population, as their daily energy intake depends more on cereal based products and the share of food in their total expenditures is higher than that of wealthier sections of population.

As a result of the more expensive cereal imports and lower domestic productions, the aggregate consumption of the LIFDCs (excluding China and India) is projected to increase at a rate lower than that of the population growth, which would lead to a slight reduction in the per caput cereal food consumption, a decline in the quality of the diet of the vulnerable population and to a significant decline in the per caput cereal feed use. The reduction in the aggregate consumption of LIFDCs (excluding China and India) could be more pronounced than forecast if the price increases prompt further reduction in demand for cereal based food products.

Cereal stocks to decline in 2008

At the current 2007 production estimates and projected imports in 2007/08, cereal stocks of the group of LIFDCs (excluding China and India) by the close of their crop seasons in 2008 are forecast to drop by 12 percent from their opening levels, after steadily increasing in the past few years.

1.  The Low-Income Food-Deficit (LIFDC) group of countries includes food deficit countries with per caput annual income below the level used by the World Bank to determine eligibility for IDA assistance (i.e. US$1 575 in 2004), which is in accordance with the guidelines and criteria agreed to by the CFA should be given priority in the allocation of food aid.