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World cereal production to hit record in 2013; Asia awash with rice
By Michael Hennigan, Finfacts founder and editor
Jul 31, 2013 - 6:26 AM
World cereal production is forecast to hit a
record high in 2013 while Asia is awash with rice as a result of both favourable
weather and public supports for rice farmers. World total cereal production is
forecast to increase by about 7% in 2013 compared to last year, helping to
replenish global inventories and raise expectations for more stable markets in
2013/14, according to the latest issue of the United Nations' Food and
Agriculture Organisation's (FAO) quarterly
Crop Prospects and Food Situation report. The increase would bring
world cereal production to 2 479m tonnes, a new record level.
FAO now puts world wheat output in 2013 at 704m tonnes, an increase of 6.8%,
which more than recoups the previous year's reduction and represents the highest
level in history. World production of coarse grains in 2013 is now forecast by
FAO at about 1 275m tonnes, up sharply (9.7%) from 2012.
World rice production in 2013 is forecast to expand by 1.9% to
500m tonnes (milled equivalent) although prospects are still very provisional.
The Wall Street Journal says Thailand, a top
exporter, is trying to sell some of its own 17m ton rice surplus, the result of
a subsidy program in which the government bought rice from farmers at
above-market prices. India, the world's biggest exporter, is expecting
near-record harvests in a couple of months, as is Pakistan. Meanwhile,
demand from large importers, including the Philippines and Nigeria, is dropping.
"If Thailand is successful in offloading its rice, it will certainly put
downward pressure on prices," said Darren Cooper, a senior economist with the
International Grains Council.
The council's index of global rice prices fell to 200 on Friday, its lowest
since September 2010 and down almost 5% this year. However, prices vary widely
from country to country, because rice is largely sold where it is produced. Just
8% is traded internationally, compared with about 20% for wheat and 36%
for soybeans.
The Journal adds that consumer groups have raised
concerns that some long-stored rice may not be safe because of high levels of
methyl bromide, which is used on crops in storage to prevent infestation by rice
weevils and other insects. Rice has a shelf life of at least three years, if
kept away from moisture, though even when dry it can be eaten by rats and
insects if not properly protected.
The FAO report focuses on developments affecting
the food security situation of developing countries. In its review of food
insecurity hotspots, the report highlights the following countries, among
others:
In Syria, 2013 wheat production dropped significantly below
average due to the escalating civil conflict leading to disruptions in farming
activities. Livestock sector has been severely affected. About 4m people are
estimated to be facing severe food insecurity.
In Egypt, civil unrest and dwindling foreign
exchange reserves raise serious food security concerns.
In Central Africa, serious food insecurity conditions prevail
due to escalating conflict affecting about 8.4m people in Central African
Republic and Democratic Republic of the Congo.
In West Africa, the overall food situation is favourable in
most parts of the Sahel following an above-average 2012 cereal harvest. However,
a large number of people are still affected by conflict and the lingering
effects of the 2011/12 food crisis.
In East Africa, although household food security has improved
in most countries, serious concerns remain in conflict areas in Somalia, the
Sudan, and South Sudan, with 1m, 4.3m and 1.2m food insecure people,
respectively.
In Madagascar, damage caused by locusts and a cyclone is
expected to reduce crop production in 2013, causing increased hunger, especially
in the southern and western regions of the country.
In the Democratic People's Republic of Korea (North Korea),
despite improved cereal harvest of the 2012 main season and the near normal
outcome of the ongoing harvest of the 2013 early season, chronic food insecurity
exists. An estimated 2.8m vulnerable people require food assistance until the
next harvest in October.
In total, there are 34 countries requiring external
food assistance, of which 27 countries are in Africa.
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