Global cereal production continues to reach unexpected highs – UN report

4 June 2009 – Following last year’s record-breaking cereal harvest, the 2009 crop is set to be the second highest documented yield, according to a new United Nations Food and Agriculture Organization (FAO) report released today.

The world’s cereals output is predicted to be 2,219 million tons in 2009, almost 3 per cent lower than in 2008, and the growth in consumption to slow to 1.3 per cent in 2009-2010, compared to 4 per cent in the previous period.

In its bi-annual “Food Outlook” report, FAO noted that the higher than expected forecast has allowed stocks to be replenished and as a result cushion global food supplies against future market shocks, such as the price hike crisis in 2008.

However, the report cautioned that prices remained high in many developing countries, and the loss of employment, income and other effects of the global economic crisis threatened the poor’s access to food.

The Rome-based agency’s report also predicted that world trade in 2009-2010 in cereals would fall by 4 per cent on last year, with the contraction mostly felt in wheat imports, which could be slashed by 10 million tons due to higher production in several wheat importing countries.

While a drop in prices is expected to save food importing countries as much as $226 billion in 2009 compared to the previous year, the continuing economic downturn could offset much of the benefit, the report warned.

FAO voiced concern over the weakening of the United States dollar and the sharp rebound of energy prices, which could exert upward pressure on international food prices.

But, “barring major crop setbacks, with world staple food stocks at more comfortable levels than in 2008, the food economy looks less vulnerable to those external developments than it was last year,” the report concluded.

In a related development, the head of the UN rural development agency said that “the impact on Africa of the recent food and fuel crisis, and now the unprecedented global economic crisis, has been severe and threatens to undo the continent’s notable economic progress.”

The President of the International Fund for Agricultural Development (IFAD), Kanayo F. Nwanze, said that by investing in and creating a dynamic smallholder agriculture sector, African Governments can limit the impact of the global financial crisis on poor rural communities.

Some 80 million smallholder farms exist in Africa, supplying around 80 per cent of African agricultural production, noted Mr. Nwanze, ahead of the Joint Annual Meeting of Ministers of Finance and Economy of the African Union (AU) and of the UN Economic Commission for Africa (ECA) on 6-7 June in Cairo.

The theme of this year’s meeting, which Mr. Nwanze is attending, is “Enhancing the effectiveness of fiscal policy for domestic resources mobilization.”

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