UN Warns Of Food Shortages As Cereal Production Falls

Bad weather, violent conflict and volatile market prices could force a drop off in the global production of cereal crops this year, the United Nations Food and Agricultural Organization (FAO) predicted today after already warning that some 1billion people worldwide are going hungry.

Drought and high food prices in much of the developing world coupled with a diversion to bio-fuels and the disincentive of high planting costs in the West look likely to reduce grain production in most of the world’s major producers.

The latest issue of FAO’s Crop Prospects and Food Situation Report warned that acute food shortages persist in 32 countries worldwide and pointed to the situation in the Gaza Strip as cause for particular concern.

In Eastern Africa more than 18 million people face serious food insecurity due either to conflict, unrest, adverse weather or a combination of the factors, while in Southern Africa the total number of food insecure is estimated at some 8.7 million.

The report stressed that in Kenya, Somalia and Zimbabwe, the situation is very serious citing drought, civil unrest and economic crises as causes.

The outlook for cereal crop production in low-income countries with food shortages is gloomy, with a likely reduction in maize crops in Southern Africa, and prolonged dry spells affecting wheat farmers in Asia. Almost half of China's winter wheat harvest is already suffering from severe drought and India is experiencing a lack of rainfall.

In South America, 2008 wheat production was halved by drought in Argentina, and persistent dry weather is damaging prospects for the region’s 2009 coarse grains.

The report noted that despite the decline in international food prices in the second half of 2008, domestic prices remain very high in several developing countries, making food unaffordable for low-income groups.

In Southern Africa and Central America, prices of their main food commodities have continued to rise or have not decreased in recent months, and in Western and Eastern Africa January prices were significantly higher than at the same time last year.

Imported rice and wheat prices, staples in these sub-regions, are also on the increase, and remain high in several poor Asian countries, including Afghanistan, Pakistan and Sri Lanka.

The FAO report pointed out that while conditions are generally favourable for winter wheat throughout Europe and the United States, the amount of planted area in these countries has declined, reflecting the prospect of sharply reduced profits compared to last year and persistently high input costs.

FAO also forecasted further increases in the use of cereals for bio-fuel production with a total of 104 million tons, up 22 per cent from the 2007/08 estimated level, representing almost 5 per cent of world cereal production. The United States alone is expected to increase production of bio-fuels to roughly 93 million tons, which is up 19 percent from the 2007/08 level.