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Culture and systems of knowledge, cultivation and food, population and consumption

Posts Tagged ‘Bangladesh

So very many of us

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RG_UN_DESA_popn_201507

The current world population of 7.3 billion is expected to reach 8.5 billion by 2030, 9.7 billion in 2050 and 11.2 billion in 2100, according to ‘World Population Prospects: The 2015 Revision”, which is compiled and issued by the Department of Economic and Social Affairs of the United Nations.

Of particular interest to us is the prediction (based on very sound estimates and the careful curation of data) that some time in 2022 the population of India will exceed the population of China. Currently, the population of China is approximately 1.38 billion compared with 1.31 billion (the UN-DESA estimate as of now) in India.

Population growth till here and the fan-tail of predictive projections for the next 85 years. Differing trajectories start becoming visible only from the mid-2020s. Image: UN-DESA

Population growth till here and the fan-tail of predictive projections for the next 85 years. Differing trajectories start becoming visible only from the mid-2020s. Image: UN-DESA

By 2022, both countries are expected to have approximately 1.4 billion people. Thereafter, India’s population is projected to continue growing for several decades to 1.5 billion in 2030 and 1.7 billion in 2050, while the population of China is expected to remain fairly constant until the 2030s, after which it is expected to slightly decrease.

China is now a ‘low fertility country’, that is, one in which women have fewer than 2.1 children, on average, over their life-times. Low-fertility countries now include all of Europe and Northern America, plus 20 countries of Asia. India is an ‘intermediate fertility’ country, that is, where women have on average between 2.1 and 5 children. Intermediate-fertility countries are found in many regions, with the largest being India, Indonesia, Pakistan, Bangladesh, Mexico, and the Philippines.

More urbanisation is expected which will concentrate larger numbers of people into town and city wards. Few will be as ideal as this graphic suggests.

More urbanisation is expected which will concentrate larger numbers of people into town and city wards. Few will be as ideal as this graphic suggests.

Most of the projected increase in the world’s population can be attributed to a short list of high-fertility countries, mainly in Africa, or countries with already large populations. During 2015-2050, half of the world’s population growth is expected to be concentrated in nine countries: India, Nigeria, Pakistan,  D R Congo, Ethiopia, Tanzania, USA, Indonesia and Uganda (listed according to the size of their contribution to the total growth).

Currently, among the ten largest countries in the world, one is in Africa (Nigeria), five are in Asia (Bangladesh, China, India, Indonesia, and Pakistan), two are in Latin America (Brazil and Mexico), one is in Northern America (USA), and one is in Europe (Russia). Of these, Nigeria’s population, currently the seventh largest in the world, is growing the most rapidly. Consequently, the population of Nigeria is projected to surpass that of the USA by about 2050, at which point it would become the third largest country by population in the world.

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How El Niño plans to hijack monsoon 2015

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ICP_El_Nino_monsoon_20150526_sm

Whether the monsoon starts off on time, whether the June, July, August and September rainfall averages are met, and whether the seasonal pattern of the monsoon is maintained are expectations that must now be set aside.

According to the Climate Prediction Center’s ENSO probability forecast, there is a 90% chance that El Niño conditions will prevail through June to August of the northern hemisphere and a more than 80% percent chance El Niño will last throughout all of 2015.

What this means, especially when record warm global atmospheric temperatures (because we in South Asia and our neighbours in East Asia have continued burned coal as if the resulting CO2 and soot simply doesn’t exist) are being set, is the remaining months of 2015 – the monsoon period included – will bring strange, dangerous and extreme weather. We have already seen that over the last week, with the death toll from the heat wave having crossed 550.

The Ministry of Earth Sciences El Niño/La Nina, Indian Ocean Dipole Update (10 May 2015)

The Ministry of Earth Sciences El Niño/La Nina, Indian Ocean Dipole Update (10 May 2015)

For the first time since 1998 – ­the year of the strongest El Niño on record, which played havoc with the world’s weather patterns and was blamed for 23,000 deaths worldwide – ­ocean temperatures in all five El Niño zones have risen above 1 degree Celsius warmer than normal at the same time. That is read by climatologists and ocean scientists as presaging an El Niño that is moderately strong to strong. The forecast models updated in May are now unanimous that El Niño is going to keep strengthening through the rest of 2015. (See also the official forecast from the USA’s government climate science agency.)

El Niño’s home is in the tropical eastern Pacific, but we in India need to watch the waters to our south very closely. New research published in the journal Nature Geoscience has examined records going back to 1950 and noticed that Indian Ocean absorbed heat at a low level until 2003. Thereafter, the excess oceanic heat in the Pacific Ocean found its way through the Indonesian archipelago and into the Indian Ocean. This is the gigantic reservoir of watery heat that is going to dictate terms to our summer monsoon, or what our school textbooks call the south-west monsoon.

It is a worry for the entire South Asian region – India, Pakistan, Sri Lanka, Bangladesh, Nepal, the Maldives, Burma, Afghanistan and Bhutan. That is why when the Forum on Regional Climate Monitoring-Assessment-Prediction for Asia (FOCRA) issued its seasonal outlook for June to August 2015 it predicted weaker than normal Indian summer and East Asian monsoons. Precipitation over land is influenced by external factors such as the El Niño Southern Oscillation (the ENSO), the ‘Indian Ocean Dipole’, the ‘Arctic Oscillation’, and so on.

There may be a “timely onset” of the monsoon, as the venerable IMD is used to saying, but that doesn’t mean our troubles are over. Far from it.

South Asia’s boring club

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RG_SAARC_old_maps_201411_india3Next year will be the 30th since the South Asian Association for Regional Cooperation was formed. Its career as an association has since the mid-eighties been neither distinguished nor even promising. The countries of the region, viewing the emerging tides of multi-lateralism elsewhere (especially in Latin America) and viewing the debris of the non-aligned movement, shuffled together to form SAARC. The group has all the equipment – a secretariat, various centres that profess to tackle common subjects, a stable of professionals who advise bored officials, and so on – but has produced little.

Some of the blame for such a desultory career must lie with the relations between Pakistan and India, which every other month swing between ‘hostile’ and ‘concerned’ but rarely tread any other territory. Still, that ought not to have weighed so heavily on the other members of SAARC – Sri Lanka, Nepal, Afghanistan, Bangladesh, the Maldives and Bhutan. The accoutrements of SAARC should have served them just as well, but have simply not been used.

RG_SAARC_old_maps_201411_bangladesh_bhutan3This is the greyish and uninspiring background to the 18th SAARC summit this week in Kathmandu, Nepal. The script of this one, as with so many others before it, has followed the same desultory trajectory. The leaders of Pakistan and India say they will meet cordially, formally and informally, and dutifully repeat all that has been said (but not done) from the previous 17 summits and numerous non-summit SAARC meetings.

RG_SAARC_old_maps_201411_ceylon3Prime Minister Nawaz Sharif of Pakistan announced that peace and stability is what the region needs, that the summit participants want to make SAARC a strong trading and economic bloc, and that the region will prosper through better security and economic cooperation. Prime Minister Narendra Modi of India announced that the development of close relations with neighbouring countries is a key priority for his government, that greater regional integration at all levels of socio-economic development is important, and that the participants would seek concrete outcomes.

RG_SAARC_old_maps_201411_pakistan3Few, other than the most committed followers of South Asian diplomatic prose, pay much attention. The economic globalisation of the last decade especially has linked countries – within South Asia and outside – with bilateral agreements rather than through multi-lateral fora like SAARC. Even where the association has invested some collective funds (in the creation of specialist centres for example, and the endowment of study and research programmes meant to benefit neighbours) the outcomes have been close to invisible.

RG_SAARC_old_maps_201411_smThis poor showing has not deterred the countries from announcing yet another new SAARC centre which will merge four existing regional centres – the SAARC Disaster Management Centre (in India), the SAARC Coastal Zone Management Centre (in the Maldives), the SAARC Meteorological Research Centre (in Bangladesh) and the SAARC Forestry Centre (in Bhutan). The suspicion, not unfounded, is that SAARC and its colourless apparatus exists to provide convenient sinecures for ex-diplomats from the eight countries and their colleagues.

Of course, the “meetings on the sidelines”, over which some mild interest is mustered pertaining to SAARC, may lead to a front page headline or two, but in the balance, that occasional fillip is hardly worth the expense of maintaining the club.

[Sections from maps are, top to bottom, (1) From ‘Madras, Mysore and Goa’, in Constable’s 1893 Hand Atlas; (2) from ‘India, Afghanistan, Belochistan, Burmah, and Siam’ by John Bartholomew; from ‘Zell’s Descriptive Hand Atlas of the World’, Philadelphia, 1873; (3) from ‘Southern India and Ceylon’ in ‘Letts’s Popular Atlas’ 1883; (4) from ‘India’ by Edward Weller, for the Weekly Dispatch Magazine, 1859. Click here for a sheet of them all (jpg, 772kb).]

Ten reliable rice years

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The AMIS prices panel as we find it in 2014 January. Weekly international rice prices (top) are for Thai rice, which have been on a plateau from 2012 Jan to around 2013 April, after which they declined. Rice futures prices (60-day average) have also been on a very gentle upward slope (middle) since 2012 Jan after pronounced swings to that point from 2010 Jan. Rice price volatility was dampened during the last quarter of 2011 until third quarter 2013 (compared to the previous two years) and has moved slowly lower over three years (bottom). Charts: FAO-AMIS

The AMIS prices panel as we find it in 2014 January. Weekly international rice prices (top) are for Thai rice, which have been on a plateau from 2012 Jan to around 2013 April, after which they declined. Rice futures prices (60-day average) have also been on a very gentle upward slope (middle) since 2012 Jan after pronounced swings to that point from 2010 Jan. Rice price volatility was dampened during the last quarter of 2011 until third quarter 2013 (compared to the previous two years) and has moved slowly lower over three years (bottom). Charts: FAO-AMIS

International grains traders rarely consider the historicity of what they deal with day in and day out. Wheat up today, maize down tomorrow, soy futures worth considering for next month, milk powder positions to be liquidated, and so on. Hold what you can profit from only so long as there is profit to be made, and futures are nothing but bets you’ve studied carefully.

But even for the hard-boiled traders, the last decade of rice has made them turn to look back and consider the curiosities of the market. Inventories of rice, all over the world, have been growing slowly and steadily for close to a decade. Now that trend, which since 2003 has been one of the longest unbroken trends in world agriculture, is ending. The change is being attributed, in the commodity exchanges and grain trading floors, to what is called a ‘downgrade’ of supplies of rice in India by the International Grains Council.

The first such forecast decline in world rice stocks, of about one million tons, means that the IGC is estimating world rice inventories at the close of 2013-14 to be 108 million tons. The curious aspect is that India is expecting a bumper rice harvest for 2013-14, and although IGC says world inventories will drop slightly (the end of the trend), there is also a reduced estimate for world consumption of rice, which is another curiosity.

According to the traders Thailand, the top rice exporter for years, has been stockpiling rice “at prices some 40%-50% above the market” and thereby prompting credit rating agencies like Moody’s to claim that the cost of the Thai programme was “threatening the country’s sovereign debt rating”.

This is plain rubbish. Traders and commodity exchanges do not grow rice to feed their families and sell if there is a small surplus to sell. The finance bots in predatory agencies like Standard and Poor’s, Moody’s and Fitch – considered the three largest by the scale of their work – don’t know the difference between a cauliflower and millet and can grow neither. Thai, Indian and African small farmers could not care less whether credit rating agencies exist and our governments should learn what true sovereignty means from our small farmers.

The FAO and IGC food price indexes and their sub-indices. For FAO the chart shows the FAO Food price Index and the cereals, oils and fats and dairy sub-indices over the last five years. For IGC the lower chart shows the IGC Grains and Oilseeds Index, also over the last five years, with the wheat, maize and rice sub-indices. The IGC rice sub-index has also recorded a plateau from 2012 January onwards with a more pronounced decline setting in from 2013 August. Charts: FAO-AMIS

The FAO and IGC food price indexes and their sub-indices. For FAO the chart shows the FAO Food price Index and the cereals, oils and fats and dairy sub-indices over the last five years. For IGC the lower chart shows the IGC Grains and Oilseeds Index, also over the last five years, with the wheat, maize and rice sub-indices. The IGC rice sub-index has also recorded a plateau from 2012 January onwards with a more pronounced decline setting in from 2013 August. Charts: FAO-AMIS

The odd tale of rice was given a late twist by two cyclones. One is Cyclone Phailin which struck the eastern Indian coast in the first week of October 2013. And he other is Typhoon Haiyan, which struck the Philippines in early November 2013. Vietnam is to supply 500,000 tons of rice to the Philippines, which has sought the supplies to boost state reserves depleted by the relief operations after Typhoon Haiyan.

The FAO’s Rice Market Monitor for 2013 November said: “Although accounting for much of the worsening in the global outlook, Asia is still expected to sustain growth in world rice production in 2013. According to the latest forecasts, the region is to harvest 672.7 million tonnes (448.6 million tonnes, milled), 1.2% more than in 2012. Foremost among countries responsible for the increase are India, Indonesia, Thailand, Myanmar and Bangladesh. By contrast, drought in China’s central and eastern provinces exacted a heavy toll on the intermediate and late rice crops, which may bring about the first production decline in the country since 2003.”

I find the FAO Rice Market Monitor more detailed than what the IGC puts out (although IGC’s public offerings are but a distillation of what subscribers to the information service obtain). The FAO Monitor has also added that given a poor delivery record so far, Thailand appears unlikely to boost its exports beyond the relatively low level of last year. And that expectations have improved for India, which may replicate the 2012 record performance, with Australia, Cambodia, China (Mainland), Egypt, Pakistan, Paraguay and the USA also forecast to export more.

If global food indices are descending, why are local food prices rising?

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The trends of ten international food commodity indices from 2006 onwards.

The trends of ten international food commodity indices from 2006 onwards.

The main chart plots the course of the Food and Agriculture Organisation (FAO) Food Price Index and nine other international food price indices. These are FAO’s cereals index, the International Monetary Fund’s (IMF) food index, the International Grains Council (IGC) wheat index, the IGC’s rice index, the UN Conference on Trade and Development’s (UNCTAD) two wheat indices, Unctad’s rice index, the World Bank’s (WB) food index and WB’s grains index.

Consumer price index trends 2006 to 2013 for five South Asian countries

Consumer price index trends 2006 to 2013 for five South Asian countries

The familiar FAO blue pair for 2013 August

The familiar FAO blue pair for 2013 August

On the main chart, after 2008 December four stages are marked. The first stage is 2008 December to 2010 July, when the indices describe a plateau but which is very much higher than where they were through 2006. The second stage is 2010 July to 2011 April, which corresponds to the second global food price rise and when all these indices rose in concert. The third stage is 2011 April to 2012 September when they all declined to another plateau which nonetheless is higher overall than the last one (stage one), but which rose steeply for a short while towards the end of the stage. The fourth stage is still current, from 2012 June, which is seeing a gradual decline in all the indices to the point they were in 2011 August-September.

I have appended to the main chart the counterpoint of the consumer price indexes from South Asian countries – Nepal, Sri Lanka, Bangladesh, Pakistan and India. The question that follows, when reading the main chart with ten indices and the CPI chart for South Asia, is why the CPI trends do not follow the international grains trends. One of the major factors (which charting this data cannot reveal, as the FAO Food Price Index does not) is the extent to which the industrialisation of prmary crops sets the retail price in the markets of Colombo or Chittagong or Karachi or Mumbai or Kathmandu. Primary crop – that is, cereals, pulses, fruit and vegetable, milk and dairy – is being moved internally, processed, packaged, moved again, retailed in modern convenience stores to a much greater degree than was the case a decade ago. Those costs lie outside what the FAO-IGC-IMF-Unctad-WB indices can describe. But we need to urgently – within these countries and as a group – share methods to gauge and monitor these costs and document their impacts on households.

A food and agri trojan horse for South Asia

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Keep your research questions away from our diets and our street food.

Keep your research questions away from our diets and our street food.

What happens when the formation of a “multi-country multi-institutional research programme consortium” is announced, the aim being to aid nutrition in South Asia? In my view, what happens is the beginning of a carefully guided construction of evidence, in some form, that will aid – not nutrition, but – the further industrialisation of crop staple cultivation, its transformation into processed food, and its delivery to urban consumers through retail food oligopolies.

Am I right or wrong? Time will tell, and as this is designed to be a six-year long programme, I think we will see early evidence by end-2013. The programme’s full name is curious as it is revealing – ‘Leveraging Agriculture for Nutrition in South Asia (LANSA)’. Is the mix of agriculture in South Asia currently unable to provide nutrition? If so what has changed from say 50 years ago? What does ‘leveraging’ mean and who will move the levers? To what end? As I see it, the programme’s name advertises its provenance, and this is the Consultative Group on International Agricultural Research (CGIAR).

In the view of the CGIAR and its constituent research institutes, agriculture’s most important task “is to provide food of sufficient quantity and quality to feed and nourish the world’s population sustainably so that all people can lead healthy, productive lives”. According to the CGIAR (and its donors, and its powerful collaborators and patrons, more of which below) achieving this goal “will require closer collaboration across the sectors of agriculture, nutrition, and health, which have long operated in separate spheres with little recognition of how their actions affect each other”.

This view is insidious and its logic is cunning – the CGIAR and its patrons use the climate change problem, they use food insecurity as a totem, and use food price volatility as justification for what they present as solutions. Until the rise of industrial agriculture and chemical fertiliser and the mechanisation of everything from field preparation to remote sensing, agriculture and nutrition and health existed at the core of the holistic existence of agrarian societies.

Vegetables, fresh and local and simple, more sensible by far than 'incentivised' 'interventions'.

Vegetables, fresh and local and simple, more sensible by far than ‘incentivised’ ‘interventions’.

Because the CGIAR imprint is so visible, it becomes immediately clear when we look at the members of this consortium, for the International Food Policy Research Institute (IFPRI) is there. But not leading. The leading institution is the MS Swaminathan Research Foundation (MSSRF) of India, and who better – for the CGIAR and its determined patrons – than to have as a helmsman in this spinerette of policy than the man who partnered Norman Borlaug all those years ago in the Punjab? Ah yes, in the shaping of modern agriculture contemporary history does provide inspiration, and I will tell you why in a moment more.

The excuse presented for LANSA to be brought to life is an unremarkable one, it is not original and has been used and abused for all sorts of schemes and programmes ever since India’s days of ‘garibi hatao‘, the 1960s mobilisation cry that was also an election slogan. “Despite rapid economic growth in South Asia, its rates of child undernutrition remain the highest in the world, with nearly half of children stunted or underweight,” complained the LANSA flyer, and added, “progress to reduce these rates is extremely slow. Ironically, most people in the region make their living from farming, which researchers say, offers great potential for improving nutrition”.

Great potential yes, but improving nutrition? We shall see. The programme (according to the scanty literature available, in concert, on all the partners’ websites) “will first examine existing agriculture policies and activities, looking at India, Pakistan, Bangladesh, and Afghanistan” (why are Sri Lanka and Nepal excluded? I have a theory, and will comment in a follow-up post). “It will then propose new initiatives to link agriculture and nutrition in the region, working closely with key decision-makers to ensure the research meets their needs.” Read that again – to ensure the research meets their needs! What happened to the children you were so concerned about, dearies? “The goal is to promote cooperation throughout the region, given the trans-border nature of many of the region’s food- and nutrition-related issues”. Yes we share rice and wheat growing ecologies, but what trans-border cooperation does this vastly ambitious consortium have in its collective mind? That too, I think, we shall see soon enough.

I have named two of the members of this group, and the others are: the Bangladesh Rural Advancement Committee (BRAC, Bangladesh), the Collective for Social Science Research (CSSR, Pakistan), the Institute of Development Studies (IDS, UK), and the Leverhulme Centre for Integrative Research on Agriculture and Health (LCIRAH, UK). Let’s take the last first. This is the philanthropic part of the Lever that we find today, far more omnisciently, via Unilever, for whom processed food is a large and growing part of its businesses. The IDS is at first glance an odd member of the group, but it has worked with the centres from both Bangladesh and Pakistan, and moreover, carries some weight with the government of Britain, whose chestfuls of pound sterling are fuelling the whole enterprise. Policy-making connections apart, this does seem to me to be mercenary of IDS, but perhaps that is the new nature of development research outfits, and neither vintage nor experience now provides insulation from the temptations of the infernal market.

What have they said they will attempt? The minimalist pamphlet mentions three “core research questions” and these are: 1. How can agriculture be provided with an enabling environment in which to leverage nutrition? 2. How can agriculture and agri-food chains be incentivised to be more pro-nutrition? 3. How can more pro-nutrition agricultural interventions be designed and implemented?

I find these very worrying. What is meant by “enabling environment”? Does it mean the same as “reform” and “austerity” for example? Are they intending to tamper with India’s mid-day meals programme from which many millions of schoolchildren benefit – and who currently (most of them every schoolday at least) eat fresh cooked meals instead of packaged, processed, biofortified, micronutriented cardboard? That second core research question reads like MBA gobbledygook to me, but coming from this famously wise group, becomes all the more worrying – “agri-food chains” and “incentivised” and “pro-nutrition”? Who will do the incentivising and at what public cost – isn’t that a fair research question too? And the third one has “pro-nutrition” again, this time combined with “interventions” – by who? Tesco and Walmart?

It is troubling that hovering behind all this trendy goal-setting and consortium building is the hungry shadow of the CGIAR and its powerful patrons. It has striven mightily to place the agriculture, nutrition, and health combination on the development agenda (formally with the IFPRI ‘2020’ conference in 2011) and including the CGIAR Research Program 4 (insiders call it CRP4). But there are the close links that are far more alarming – to USAID’s Feed the Future, to the World Economic Forum’s New Vision for Agriculture machinations and to the Bill and Melinda Gates Foundation and its championing of agri-biotech. These, in our era, are designed as the heavy machinery that supports foreign and trade policy in the international sphere. With such connections LANSA, I fear and suspect, is a new food and agriculture policy trojan horse being readied for South Asia.

What ails the South Asian monsoon?

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Rainfall in India’s meteorological sub-divisions for the 2012 monsoon. The India Meteorological Department (IMD) has finally admitted that this year will be a drought, as it has forecast rainfall for August and September as “below normal”. Map: IMD

This set of images helps explain the worrying 2012 monsoon season in South Asia and why drought conditions are emerging in more districts with every passing week.

We are coming up to the eight-week mark of the 2012 monsoon (taking the 04-06 June date as the ‘normal’ for the monsoon to become active over south-west India, after which the climatological system slowly advances over the peninsula and up into northern India).

The Indian Meteorological Department (IMD) has not helped, by maintaining a scientific detachment between forecasting science and the dire situation of farmers and consumers. With emergency drought programmes new being rolled out in many states (more than a month late), the IMD’s refusal to speak plainly to those who need the information the most is unpardonable.

Worse, the Department on its website and its communications walls off its forecasting behind a very unfriendly science interface (see this commentary for a detailed explanation), and appears oblivious about its responsibilities to those for whom it exists – the citizens of India who are waiting for rain.

This set of images (strips below, you can click on the images for the full-size versions) describes what the IMD ought to be disseminating (but stubbornly refuses to). These are 24, 48, 72 and 96 hour regional forecasts for South Asia of accumulated precipitation and temperature extremes.

Day 1 – 02 Aug 2012

Day 2 – 03 Aug 2012

Day 3 – 04 Aug 2012

Day 4 – 05 Aug 2012

The four regions you see in the panels are Peninsular India and Sri Lanka, Western India and Pakistan, Northern & Central India and Nepal, and Eastern India and Bangladesh. These are from the monsoon forecasting sub-site of the Center for Ocean-Land-Atmosphere Studies – of the Institute of Global Environment and Society (IGES) – which processes and synthesises data from the NOAA/NCEP, which is the National Oceanic and Atmospheric Administration (NOAA, the US government agency), National Centers for Environmental Prediction. These regional weather forecasts are presented as a running four-day ensemble of images showing daily forecasts of 2-metre temperature minima and maxima and accumulated precipitation covering the four sub-regions.

Black Sea questions, South Asian rice, the ethanol effect – IGC on grains in 2012 February

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IGC's supply and demand graphs for; top row - total grains, wheat, maize; bottom row - rice, soyabean, and IGC freight index

The International Grains Council (IGC) has released its grains market report for February 2012. In its market commentary, which is a cogent 250-word summation of 1,840 million tons of produce and where it will go, the IGC has said:

Grain and oilseed markets mostly strengthened in the past month, the IGC daily index (GOI) up 6% to near four-month highs. The upturn reflected concerns in early February about maize and soyabean crops in South America, as well as the impact of the recent severe cold spell in parts of Europe and the CIS.  Moreover, after a very high rate of shipments from the Black Sea region in the first half of the season, sales activity declined, with US grain, in particular, attracting much more buying interest.

Wheat export prices in Europe climbed by some 8%, in somewhat tighter markets, with reports of logistical problems and possible future export restrictions in the Black Sea region (though denied), seen as potentially bullish. However, global supplies appear ample, with the likelihood that a portion of upcoming large South Asian wheat harvests will be offered for export. US maize (corn) values remained firm, supported by reports of crop losses in South America and active export interest for remaining old crop supplies, although forecasts of a further rise in US plantings this spring added a bearish element.

Oilseed prices rallied strongly in the past month, reflecting worries about the final outcome of soyabean crops in Argentina and Brazil, good demand for US supplies, including a new trade deal with China, and rising crude oil values. International rice market trends were more mixed, with Thai prices supported by domestic support measures but those in Vietnam, especially broken grades, easing to compete with South Asian offers.

[The IGC 2012 February grains market report is here. The data files as excel spreadsheets are available in this zip archive.]

The IGC’s sectoral advice is:

Grains: The world production estimate is lifted by 11m. tons, to 1,841m., largely because of upward revisions in Australia, Kazakhstan, Ukraine, India and Brazil, the latter because losses of its main maize crop will likely be more than compensated by a larger second crop. These upward revisions outweigh a reduced maize figure for Argentina. To an extent, the forecast of world consumption is adjusted higher to reflect the bigger crop estimates, with total use of grains placed 5m. tons above the January forecast, at 1,836m. The change is mainly for feed use, now put at 775m. tons, 4m. more than before and 4% higher than in 2010-11.

Of particular interest is the marked slowdown in the annual increase in industrial use, expected to rise by only 2% this year, with ethanol use of maize in the US set to recede slightly from its peak in 2011. While the latest statistical forecasts of supply and demand suggest that, nominally, global carryover stocks will rise slightly in 2011-12 from last year’s low figure, to 378m. tons (373m.), the total carryover in the eight major grain* exporters is still expected to dip by 6m. tons, to 131m., the smallest figure since 2007-08.

As this pair of charts shows, the Baltic Dry Freight Index has dropped not only to a one-year low, but is at a three-year low. Charts: Bloomberg

Wheat: A further increase in the global wheat production estimate for 2011-12, to 695m. tons (653m.), boosts total availabilities to 892m., their highest ever. Projected food and industrial consumption are both revised lower this month, but attractive prices, particularly compared with maize, lift the forecast of feed use by 2m. tons, to 131m. (115m.), the most since the early 1990s. Strong feed wheat demand is reflected in the global trade figure, helping to lift total wheat trade to match the 2008-09 peak, at 136.8m. tons (125.7m.). Even though total consumption is growing at a faster than average pace, world stocks are projected to rise to 211m. tons (196m.), eclipsing the previous record in 1999-00.

Maize (Corn): Maize production in 2011-12 is expected to increase by 4%, to a record 864m. tons. The US crop, while disappointing, was slightly above average, and bumper harvests were collected in China, Ukraine and the EU. A severe drought has reduced yield prospects in South America, especially in Argentina, but Brazil remains on track to produce a record crop. Improved supplies in some countries are boosting consumption, with overall use forecast at a record high. Feed use of maize is expected to increase at a faster than average pace but, with US ethanol production likely to decline slightly, the rise in industrial demand will be below trend. With demand outpacing the increase in supplies, ending stocks are forecast to tighten further, including in the US. Amid solid buying by a number of importers, world trade is forecast to rise to a four-year high.

Barley: Better than expected 2011-12 harvest results, including in Argentina and Australia, lift the estimate of world barley production by 1.1m. tons compared with last month, to 134.7m. World consumption is expected to remain steady, contained by uncompetitive prices in the feed sector, especially in the EU, and by sluggish growth in brewing demand. While higher than previously forecast, carryover stocks are set to remain tight, particularly in the EU and North America. The projection of world trade is raised by 1.2m. tons, to a three-year high of 17.8m., with a steep upturn in buying by Saudi Arabia.

Rice: Due to increases in Asia’s biggest producers, China and India, global rice output is projected to rise by 3% in 2011-12, to 463m. tons. The record outturn will be accompanied by a further expansion in demand, to 460m. tons (449m.), but the 2011-12 carryover is still expected to increase by 4%, to 99m. Much of the forecast rise in global stocks will be due to increases in the major exporters, notably in India and Thailand, seen 14% higher, at a record 32.7m. tons. World trade in 2012 is forecast to contract by 7%, to 32.2m. tons, owing to significantly reduced purchases by key Asian buyers, including Bangladesh and Indonesia.

Ocean freight rates between major export-import regions.

FAO 2011 October Food Index down, food prices still up, what’s going on?

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FAO has released its Food Price Index for October 2011, saying the index has dropped dropped to an 11-month low, declining 4 percent, or nine points, to 216 points from September. Indeed the index has dropped, declined and has certainly not risen. But does this mean food prices for the poor in many countries, for labour, for informal workers, for cultivators too – has the cost of food dropped for any of them?

The answer is a flat and unequivocal ‘No’. FAO has said so too: “Nonetheless prices still remain generally higher than last year and very volatile.” At the same time, the Rome-based food agency has said that the “drop was triggered by sharp declines in international prices of cereals, oils, sugar and dairy products”.

The FAO has said that an “improved supply outlook for a number of commodities and uncertainty about global economic prospects is putting downward pressure on international prices, although to some extent this has been offset by strong underlying demand in emerging countries where economic growth remains robust”.

Once again, the FAO is speaking in two or more voices. It should stop doing so. A very small drop in its food price index does not – repeat, does not – indicate that prices for food staples in the world’s towns and cities has dropped and people can afford to buy and cook a square meal a day for themselves and their children. Not so at all.

I am going to contrast what FAO has said about its October food price index with very recent reportage about food and food price conditions in various parts of the world.

FAO: “In the case of cereals, where a record harvest is expected in 2011, the general picture points to prices staying relatively firm, although at reduced levels, well into 2012. International cereal prices have declined in recent months, with the FAO Cereal Price Index registering an eleven month-low of 232 points in October. But nonetheless cereal prices, on average, remain 5 percent higher than last year’s already high level.”

Business Week reported that rising food prices in Djibouti have left 88 percent of the nation’s rural population dependent on food aid, the Famine Early Warning Systems Network said. A ban on charcoal and firewood production, which provides about half of the income of poor people in the country’s southeast region, may further increase hunger, the Washington- based agency, known as Fewsnet, said in an e-mailed statement today. Average monthly food costs for a poor urban family are about 33,907 Djibouti francs ($191), about 12,550 francs more than the average household income, Fewsnet said. Urban residents in the Horn of Africa nation don’t receive food aid, it said.

FAO: “According to [FAO’s November 2011] Food Outlook prices generally remain ‘extremely volatile’, moving in tandem with unstable financial and equity markets. ‘Fluctuations in exchange rates and uncertainties in energy markets are also contributing to sharp price swings in agricultural markets,’ FAO Grains Analyst Abdolreza Abbassian noted.”

A Reuters AlertNet report quoted Brendan Cox, Save the Children’s policy and advocacy director, having said that rising food prices are making it impossible for some families to put a decent meal on the table, and that the G20 meeting [currently under way in Cannes, France] must use this summit to agree an action plan to address the food crisis. Malnutrition contributes to nearly a third of child deaths. One in three children in the developing world are stunted, leaving them weak and less likely to do well at school or find a job. Prices of staples like rice and wheat have increased by a quarter globally and maize by three quarters, Save the Children says. Some countries have been particularly hard hit. In Bangladesh the price of wheat increased by 45 percent in the second half of 2010. In new research, Save the Children analysed the relationship between rising food prices and child deaths. It concluded that a rise in cereal prices – up 40 percent between 2009 and 2011 – could put 400,000 children’s lives at risk.

FAO: “Most agricultural commodity prices could thus remain below their recent highs in the months ahead, according to FAO’s biannual Food Outlook report also published today.  The publication reports on and analyzes developments in global food and feed markets. In the case of cereals, where a record harvest is expected in 2011, the general picture points to prices staying relatively firm, although at reduced levels, well into 2012.”

IRIN News reported that food production is expected to be lower than usual in parts of western Niger, Chad’s Sahelian zone, southern Mauritania, western Mali, eastern Burkina Faso, northern Senegal and Nigeria, according to a report by the World Food Programme (WFP) and the Food and Agriculture Organization (FAO), and a separate assessment by USAID’s food security monitor Fews Net. “We are worried because these irregular rainfalls have occurred in very vulnerable areas where people’s resilience is already very weakened,” said livelihoods specialist at WFP Jean-Martin Bauer. Many Sahelian households live in a state of chronic food insecurity, he said. “They are the ones with no access to land, lost livestock, without able-bodied men who can find work in cities – they are particularly affected by a decrease in production.” A government-NGO April 2011 study in 14 agro-pastoral departments of Niger noted that pastoralists with small herds lost on average 90 percent of their livestock in the 2009-2010 drought, while those with large herds lost one quarter. Those who had lost the bulk of their assets have already reduced the quality and quantity of food they are consuming.

FAO: “Food Outlook forecast 2011 cereal production at a record 2 325 million tonnes,  3.7 percent above the previous year. The overall increase comprises a 6.0 percent rise in wheat production, and increases of 2.6 percent for coarse grains and 3.4 percent for rice. Globally, annual cereal food consumption is expected to keep pace with population growth, remaining steady at about 153 kg per person.”

The Business Line reported that in India, food inflation inched up to 11.43 per cent in mid-October, sharply higher than the previous week’s annual rise of 10.6 per cent, mainly on account of the statistical base effect of the previous year. Inflation in the case of non-food items and the fuels group, however, eased during the latest reported week. According to data released by the Government on Thursday, an increase in the year-on-year price levels of vegetables and pulses contributed to the surge in the annual WPI-based food inflation for the week ended October 15, apart from the base effect. Sequentially food inflation was up 0.25 per cent.

FAO: “The continuing decline in the monthly value of the FAO Cereal Price Index reflects this year’s prospect for a strong production recovery and slow economic growth in many developed countries weighing on overall demand, particularly from the feed and biofuels sectors.”

Al Ahram reported that Egyptian household budgets had mixed news in September with prices for some basic foods tumbling month-on-month and others showing small climbs, according to state statistics agency CAPMAS. Figures released this week show the price of local unpacked rice fell 15.6 per cent to LE4.96 per kilo between August and September 2011. It was the commodity’s first decline in nearly a year, although the per kilo price remains 68 per cent higher than the LE2.95 that rice cost in October 2010. Chicken also fell 5.8 per cent to LE16.26 per kilo between August and September. Other staples, however, continued to rise; the price of potatoes climbed 14 per cent to LE4.89 per kilo, while a kilo of tomatoes gained a monthly 14.8 per cent to cost LE4.65.

FAO March bulletin, Crop Prospects and Food Situation for 2011

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The FAO has released its Crop Prospects and Food Situation, the first for 2011, in March. The overview is:

  • Wheat production: leading producers, (million tonnes)

    FAO’s first forecast for world wheat production in 2011 stands at 676 million tonnes, 3.4% up from 2010. This level of production would still be below the bumper harvests of 2008 and 2009.

  • International grain prices remained volatile in the first three weeks of March.
  • The cereal import volume in low-income food deficit countries (LIFDCs) as a group is anticipated to decline in 2010-11 due to increased production. However, their import bill is forecast to rise by 20% following higher international prices.
  • In Asia, prospects for the 2011 wheat crop are mostly favourable. In China, the outlook remains uncertain but the easing of the drought situation in the North China Plain is a positive development. In Japan, a powerful earthquake and subsequent tsunami have caused devastation with a potentially significant impact on agriculture and food trade.
  • In North Africa, the current situation in Libyan Arab Jamahiriya has resulted in the displacement of large numbers of people and disruption to the flow of goods and services in this heavily cereal import dependent region. WFP has initiated a regional emergency operation to provide food assistance to the affected people.
  • In Southern Africa, prospects for the main 2011 maize crop are generally favourable and relatively low prices have helped stabilize food security.
  • In Eastern Africa, food insecurity has increased in drought-affected pastoral areas of Somalia, Kenya and Ethiopia despite bumper harvests in 2010 and generally low and stable food prices.
  • In Western Africa, post-election violence continues to cause a large population disruption and disturb trade and livelihoods in Côte d’Ivoire and the neighbouring countries.

Countries requiring external assistance for food, 29 of which 21 in Africa

Overall favourable outlook for global 2011 wheat production: At this stage of the season, with the bulk of the coarse grains and paddy crops yet to be planted in the coming months, it is still too early for even a preliminary forecast of global cereal output in 2011. For wheat, however, in the northern hemisphere, which accounts for the bulk of the global production, winter crops are already developing or soon to come out of dormancy, while spring planting is underway in some countries and a preliminary picture of global prospects is already available.

FAO’s first forecast for world wheat production in 2011 stands at 676 million tonnes, representing a growth of 3.4% from 2010. Plantings have increased, or are expected to increase, in many countries in response to strong prices, and yield recoveries are expected in areas that were affected by drought in 2010, the Russian Federation in particular. The global output forecast for 2011 would be still below the bumper harvests in 2008 and 2009.

In Asia, prospects for the 2011 wheat crop, to be harvested from April, are mostly favourable in India and Pakistan, where good harvests are forecast. However, the outlook in China is uncertain because of winter drought in the North China Plain despite recent beneficial precipitation.

Cereal export prices

In the Asia CIS subregion, Kazakhstan is the major producer and the bulk of the crop is yet to be sown this spring. Weather permitting, farmers are expected to maintain the relatively high planting level of the past two years, especially in view of strong prices. Assuming also a recovery in yields after last year’s drought-reduced level, a significant increase in production could be achieved. In North Africa, early prospects for the 2011 wheat crops are generally favourable, except in Tunisia where dry conditions point to a repeat of last year’s drought-reduced crop.

In the southern hemisphere, where the major wheat crops are still to be sown, producers are also expected to increase plantings in response to this year’s favourable price prospects. However, this may not translate to larger crops in Australia or Argentina, where yields are assumed to return to average after bumper levels in 2010.

World cereal production and utilisation

Estimate of world cereal production in 2010 slightly up on December forecast: The estimate for world cereal production in 2010 has been revised upward slightly since previously reported (Crop Prospects and Food Situation, December 2010) to 2,237 million tonnes (including rice in milled terms), just 1.1% below the bumper output in 2009. The decline in cereal production in 2010 was entirely due to lower output in developed countries while in developing countries production rose significantly by almost 5%. The estimate for world wheat production in 2010 now stands at almost 654 million tonnes, 1 million tonnes above FAO’s December forecast but still some 4% less than in 2009.

The latest revision mostly reflects a better than expected outcome of the harvest in Argentina, which more than offset some downward adjustments to estimates in Asia (most notably Kazakhstan) and Europe (mostly the Russian Federation). For coarse grains, the estimate of output in 2010 is now put at 1 117 million tonnes, 7 million tonnes up from the previous forecast and just marginally less than the 2009 level. The upward revision was largely driven by increased estimates for China, India, Ethiopia and Sudan.

The estimate for global rice production in 2010 remains unchanged since December at 466 million tonnes (in milled terms). Improved prospects for Brazil, China mainland and Thailand largely offset a sizeable downward revision for India. At this level, the aggregate output of the 2010 rice seasons, which will close when the northern hemisphere countries complete the harvest of their secondary crops by May-June, would be 2% up from 2009, mostly on account of large gains in Asia, where Bangladesh, China, India and Indonesia, the leading world producers, are all expected to tally larger crops.