NAIROBI, 21 July 2008 (IRIN) - According to FAO's Crop Prospects and Food Situation report published on 18 July, record cereal production of 2,180 million tonnes in 2008 – a 2.8 percent increase on 2007 – should contribute to some improvement in the global supply and demand situation. Despite the anticipated increase in world output, cereal markets will remain tight in 2008/09. Total cereal supply (carry-over stocks plus production) will barely exceed the anticipated utilisation; world cereal reserves will recover only marginally from the current estimated 30-year low.

In southern Africa the outcome of the recent cereal harvest was favourable, with a recovery of production in South Africa and good crops in several other countries, but output fell well below last year's level. In East Africa the outlook is unfavourable for cereal harvests in several countries, including Ethiopia, Somalia, and parts of Kenya and Uganda. In North Africa, Morocco's cereal production is expected to recover strongly from last year's drought-reduced level, but Tunisia is facing a smaller harvest.

In Asia cereal output is set to remain close to last year's good level with bumper crops in China and India more than offsetting reductions expected in Pakistan and Iran. Food insecurity is expected to increase in Afghanistan and Tajikistan.

In South America, harvesting of the main season coarse grain crops is under way, and record output is expected following larger plantings in response to high international prices. Prospects for the wheat crop are mixed; plantings increased in Brazil but policy and weather factors led to smaller plantings in Argentina.

In Australia the prospects for 2008 winter cereal crops were generally favourable as of late June.

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