Low-Income Food-Deficit Countries^1/
food situation overview

Increase in LIFDC cereal production to slow down in 2007 following four years of sustained growth

The aggregate cereal production of the 82 LIFDCs is forecast to rise only marginally this season after having increased at sustained rates since 2003. In the largest countries, China and India, bumper cereal crops are in progress, but when they are excluded from the group, the rest of LIFDC show a slight decline in their aggregate cereal production this year. Most of this decline is in Northern Africa where the output is forecast one-quarter below its level of last year, reflecting a devastating drought in Morocco. Elsewhere in Africa, a good aggregate cereal harvest was gathered in Southern Africa, although poor outcomes were obtained in some countries, notably Zimbabwe. In Eastern, Western and Central Africa, where harvest of the 2007 main seasons have started or are about to start, good outcomes are expected despite severe floods and the aggregate outputs are forecast slightly below the high levels of 2006. Similarly, in Asia, notwithstanding the serious localized damage to households and crops caused by severe floods this season, the abundant rains were overall beneficial for cereal production. In particular, in CIS in Asia, production recovered from the reduced level of the previous year affected by drought. In Central America and the Caribbean, an above average crop was obtained in Haiti and good main season cereal crops are in progress in Nicaragua and Honduras.

Cereal imports to decline marginally but import bill at record levels

At the current forecast production levels and relatively comfortable levels of carry-over stocks, the cereal imports of the group of LIFDC in marketing years 2007/08 or 2008 is forecast at 90.4 million tonnes, less than half a million tonnes lower than the level of the previous year. The largest decline is in India, which last year’s imported 6.7 million tonnes of wheat to replenish stocks and this year is forecast to import 3 million tonnes. This decline will be partly offset by a sharp increase in Morocco, which will import 6.3 million tonnes of cereals in 2007/08.

In spite of the somewhat lower volumes of cereal imports by LIFDCs this season, their import bill is forecast to increase by 14 percent from 2006/07, after having increased 35 percent in the previous season. This reflects the high levels of international cereal prices and freight rates, which have already resulted in domestic prices of bread and other basic foods increasing sharply in a number of LIFDC. Food riots have been experienced in some countries in Africa and Near East. Giving the volatility of prices in the international markets, the situation could deteriorate further in the coming months leading to reduction in imports and food consumption in LIFDCs, in particular considering that their aggregate stocks are already anticipated to drop by about 10 percent by the end of the 2007/08 marketing seasons.

Table 7. Cereal Import Bill in LIFDCs by region and type (July/June, US$ million)
	2002/03	2003/04	2004/05	2005/06	2006/07	2007/08
					estimate	f'cast
LIFDC	14 034	15 813	18 841	18 166	24 613	28 145
Africa	6 501	7 098	8 422	8 387	10 315	13 012
Asia	7 014	8 052	9 722	9 011	13 372	14 092
Latin America and Caribbean	317	389	418	477	570	625
Oceania	69	76	78	82	97	104
Europe	133	198	201	209	259	312
Source: FAO.

1.  The Low-Income Food-Deficit (LIFDC) group of countries includes food deficit countries with per caput annual income below the level used by the World Bank to determine eligibility for IDA assistance (i.e. US$1 575 in 2004), which is in accordance with the guidelines and criteria agreed to by the CFA should be given priority in the allocation of food aid.