FAO Forecasts Increased Wheat Harvest For 2013

11 Mar 2013 --- First forecasts for the 2013 wheat harvest point to production increasing to 690 million tonnes - 4.3 percent up on 2012. This would be the second largest crop on record, according to the latest issue of FAO's quarterly Crop Prospects and Food Situation report.

The production hike is expected mostly in Europe, driven by increased plantings in response to high prices and a recovery in yields in some countries, notably the Russian Federation.

The outlook in the United States, while less favourable because of earlier drought conditions, has improved somewhat over the last few weeks.

Meanwhile, the recently lower prices of wheat and, to some extent, maize kept the FAO Food Price Index - also published -- unchanged at 210 points for the second consecutive month in February. That is 2.5 percent, or five points, less than in February 2012.

Since November 2012 the Index has moved within a narrow 210 - 212 point range as increases in the prices of dairy products and oils/fats were largely balanced out by declines in the prices of cereals and sugar.

Too early for global cereals forecast

At this stage of the season, with the bulk of the coarse grains and paddy crops yet to be planted it is still too early for even a preliminary global cereal forecast for 2013.

But prospects for the first 2013 coarse grains crops in the southern hemisphere are generally favourable. Rice prospects are also encouraging in several countries below the equator.

The Crop Prospects and Food Situation 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:

Syria, where an estimated 4 million people are in urgent need of food and livelihood assistance as severe civil conflict continues.  In addition, the Syrian refugees are putting strain on other countries in the region. Some international food assistance is being provided.

Democratic People's Republic of Korea, where a dry spell in May-June 2012 followed by localized floods in July-August cut crop production and damaged agricultural infrastructure. Chronic food insecurity exists in the country, with 2.8 million severely vulnerable people requiring food assistance during the 2012-13.

Escalating conflict

In the Democratic Republic of the Congo escalating conflict has increased the total number of internally displaced people to an estimated 2.7 million. Agricultural activities have been hindered, especially in the eastern areas, while high food prices continue. Nationally, a total of 6.4 million people are estimated to be in a state of food and livelihood crisis.

Mali, where insecurity in the northern part of the country has disrupted food commodity flows and resulted in large population displacements. This has worsened the already precarious food situation created by drought in 2011.

Sudan, where about 3.5 million people are estimated to be in need of humanitarian assistance, mainly in conflict areas.

Regarding international food prices, FAO's Cereal Price Index averaged 245 points in February, down by just less than 1 percent from January but still 8 percent higher than in February 2012.

The FAO Oils/Fats Price Index averaged 206 points in February, up 0.4 percent from January. The rise was driven by palm oil, mainly reflecting the expected seasonal production slowdown and reduction in inventories from their current high levels.

The FAO Dairy Price Index averaged 203 points in February, 2.4 percent, or 5 points up from January,  representing the most substantial increase since September 2012. The rise was principally a reflection of falling production in Oceania due to hot weather.

The FAO Meat Price Index averaged 178 points in February, the same as January.  Poultry prices were slightly lower and pork marginally higher, while other types of meat remained largely unchanged.  The meat index has remained substantially stable since October 2012.

The FAO Sugar Price Index averaged 259 points in February, down 3 percent, or 8.6 points, from January. Prices declined for the fourth consecutive month, on the expectation of a relatively large world production surplus and improved export availabilities in 2012-13.