The world cereal supply situation remains tight and prices have risen. Global stocks are being drawn down to well below the range FAO considers necessary to safeguard world food security. Continuing high cereal import costs have serious implications for low-income food-deficit countries whose import bill is estimated to rise by U.S.$ 3 billion or almost one-quarter in 1995/96.
A minimum increase of some 4 percent in cereal output is required in 1996 to meet anticipated consumption needs in 1996/97 and avoid a further deterioration in global food security. So far, the early outlook for the 1996 crops points to a recovery in production, notwithstanding current concern over the United States wheat crop. The winter wheat area has increased significantly in several major producing areas and there are indications that spring grain area will also expand. But much will depend on the weather in the coming months.
Precarious food supply situation persist in several developing countries. The situation is aggravated by the increased cost of cereal imports and reduced food aid availabilities, currently forecast to be the lowest in 20 years, while overall needs are rising. As a result, many developing countries will face serious difficulties in meeting their food deficits through imports.World trade in cereals in 1995/96 is now forecast at 201 million tons. Despite high prices, wheat imports are expected to increase in 1995/96, those of coarse grains to remain unchanged and trade in rice will be close to record levels. Cereal imports by developing countries would rise further to 145 million tons, representing about three-quarters of global cereal trade.
Export prices for cereals remain under pressure from the tight supply situation. Wheat prices have risen further in response to active buying and concern over possible damage to the 1996 winter wheat crop in the United States. Maize prices continued to rise steadily due to strong demand for feed. International prices for good quality rice firmed up again in January because of a tightening of export supplies from Thailand.