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

2008 aggregate cereal production of LIFDCs forecast to increase marginally for second consecutive year

FAO’s early forecast of 2008 cereal production for the 82 LIFDCs as a group points to an increase of 1 percent from 2007. This increase will be lower than the population growth for the second consecutive year, implying a further drawdown in stocks, higher imports and/or decline in per caput consumption in the 2008/09 seasons. Moreover, when China and India, normally accounting for one-third of the aggregate cereal output, are excluded, production of the rest of LIFDCs is forecast to remain virtually unchanged from last year.

In LIFDCs of southern Africa, the outlook for the 2008 cereal crops, about to be harvested is generally favourable. Production is forecast to increase from last year in most countries. However, prospects have deteriorated in Zimbabwe and southern parts of Mozambique, following dry weather in the second half of the season. In North Africa, cereal output is expected to triplicate from the 2007 drought-affected level in Morocco, while in Egypt an improved harvest is anticipated on account of larger wheat plantings. In eastern Africa, a bumper 2008 wheat crop is being gathered in Sudan, where production nevertheless covers only some 40 percent of annual consumption. In other countries of the subregion cereal crops are being planted or are about to be planted but rains are somewhat delayed.

In Far East Asia, good 2008 wheat crops are in prospect in China, India and Pakistan, but outputs will mostly be a bit lower than last year’s record levels, while the main paddy crops are still to be planted. In most Asian CIS countries, early prospects for the 2008 cereal production are favourable following larger plantings of wheat, the main crop and food staple in the subregion, but in Tajikistan the outlook is being negatively affected by delayed spring rains and locust infestations. In the Near East, the outlook for this year’s cereal production is uncertain in Afghanistan, reflecting below-normal rains and an extreme cold winter, respectively.

In Ecuador, the only LIFDC in South America, the outlook for the 2008 cereal harvest is poor following heavy rains, severe floods and crop losses in the second half of February. The Government has declared a state of emergency in the whole country and requested international assistance. Elsewhere, the 2008 main cereal seasons have not yet started in Western Africa and in Central America.

Rising cereal import costs

The LIFDCs total volume of cereal imports in 2007/08 is forecast to reach some 82 million tonnes, a marginal decline from the level of the past season. Satisfactory 2007 cereal production and significant drawing on inventories have helped most LIFDCs to keep their imports stable or even below the previous season’s levels. However, as a result of the sharp increase in international cereal prices, freight rates and oil prices, the 2007/08 aggregate cereal import bill of the LIFDCs is projected to rise by 56 percent from 2006/07, after having increased by 37 percent in the previous year. This will have a negative impact on the balance of payments and current account positions of the LIFDCs in general and in particular on those in Africa, where the aggregate cereal import bill is projected to increase by a higher 74 percent rate.

Sharp increase in domestic food prices

Soaring international cereal prices, coupled with reduced national cereal production in parts, are exacerbating food inflation in countries across the world. Despite policy measures taken by governments to mitigate the transmission of international price into domestic food markets (see box on Policy Measures), prices of bread, rice, maize products, milk, oil, soybeans and others basic foods have increased sharply in the past months in a number of developing countries. Most affected by the food price inflation are the low-income groups of population, as the share of food in their total expenditures is much higher than that of wealthier populations. Food represents about 10-20 percent of consumer spending in industrialized nations, but up to 60-80 percent in developing countries. The urban poor, together with food deficit farmers, are among the worst affected groups as they depend on the market to access food products.

In Western Africa, in Côte d’Ivoire, prices of rice in March 2008 more than doubled their levels of a year earlier. In Senegal wheat prices by February 2008 were twice the level of a year ago, while those of sorghum were up by 56 percent. In the important subregional Nigerian market of Dawanau, prices of sorghum and millet have doubled in the past five months. In Eastern Africa, in Somalia, the price of wheat flour in northern areas has almost tripled in the last year. In Sudan, prices of wheat in the capital city of Khartoum this February were 90 percent higher than a year earlier. In Uganda, prices of maize in March 2008 have risen by 65 percent from their levels of September last year. In Ethiopia, maize prices in Addis Ababa in March 2008 doubled their levels of a year ago, while those of wheat were 42 percent higher. In Southern Africa, maize prices in Mozambique (capital city of Maputo) in March were 43 percent higher than a year ago. In Asia, in the Philippines, rice prices have increased by 50 percent in the past two months. In Sri Lanka, prices of rice in March 2008 were almost twice those of a year ago, while in Bangladesh they increased by 66 percent in the same period. In CIS countries of Asia, in Tajikistan prices of bread in February were twice the levels at the same time in 2007, while in Armenia the price of wheat flour has increased by one-third in the same period. In Latin America and the Caribbean, in Haiti food prices are reported as being 50 to 100 percent higher than in the past year.

Serious social unrest in several countries

Social unrest and food riots, which have resulted in loss of lives in some cases, have been reported in the past month in Egypt, Cameroon, Côte d’Ivoire, Senegal, Burkina Faso, Indonesia, Madagascar and the Philippines as well as in Haiti in early April. In other countries, such as Pakistan and Thailand, troops have been deployed to avoid seizing of food from the fields and from warehouses.

Rate of cereal imports higher than last season

Available information received in GIEWS by late March 2008, indicates that about 55 percent of the LIFDC’s aggregate cereal import requirement of some 82 million tonnes in 2007/08 marketing years has been already covered. Similarly, half of the food aid needs in the amount of 4.6 million tonnes, or some 6 percent of the total import requirements, have been sourced from donors’ deliveries or pledges. The pace of both commercial cereal imports and food aid this season has been faster than in the past year, despite soaring international prices. In Southern Africa, where the 2007/08 marketing year (April/March) has just ended in most countries, latest reports indicate that some 80 percent of the import needs were sourced; but this percentage could increase in the next months due to time lag in information received. Imports have also progressed satisfactorily in LIFDCs of North Africa (Morocco and Egypt), but in Western Africa, where the marketing years will end in October 2008 (Sahel countries) and December 2008 (Coastal countries), only 11 percent of the cereal import needs have been secured.

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. USD 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.