13 September 2012

Southern Africa: SADC Faces Imminent Food Crisis

Windhoek — Considerable declines in global grain production this year have prompted new fears of food shortages and an escalation in food prices similar to the 2008 crisis.

The UN Food and Agricultural Organisation (FAO) indicates that global cereal production will not be sufficient to fully cover expected utilisation during 2012/13, pointing to a larger drawdown of global cereal stocks than earlier anticipated.

The Southern Africa Development Community (SADC) has issued new warnings for the region, reporting isolated pockets of households that have run out of food harvested in the last season.

Namibia, although not mentioned in the SADC brief, has confirmed pockets of drought and cases of food shortages due to poor or failed harvests in the Kunene and Omusati regions.

In the Omusati Region, 20 000 households are currently receiving food aid from the government's Emergency Management Unit.

In the Kunene Region, which started receiving emergency food assistance in June, authorities are keeping a hawk's eye on the conditions with the regional governor Joshua //Hoëbeb saying the region could appeal for more food assistance if it experiences poor rainfall this year.

"Distressing and crisis food security indicators are evident in [the Southern African] region among countries that experienced persistent and prolonged dry spells and reduced harvests in the 2011 and 2012 season," according to SADC's Food Security Update, jointly produced by the Food Security and Nutrition Working Group.

Angola, Malawi, Mozambique, Lesotho, and Zimbabwe have been singled out for "notable levels of food insecurity."

However, the situation could be worsening for the entire region in light of escalating food inflation over the past few months, fuel price increases, and the declining purchasing power among consumers.

SADC's observation of declining purchasing power comes at a time when South Africa and Namibia note with concern increases in consumers' credit extensions that go towards cushioning monthly expenditure pressures and not towards productive activities that stimulate economic growth.

"The current situation in world food markets, characterised by sharp increases in maize, wheat and soybean prices, has raised fears of a repeat of the 2007-2008 world food crisis. But swift, coordinated international action can stop that from happening.

"We need to act urgently to make sure that these price shocks do not turn into a catastrophe hurting tens of millions over the coming months," said FAO in its September update.

FAO's latest forecasts confirm a significant tightening of the global grain supply-demand balance in the 2012/13 marketing season.

The forecasts put the world's cereal production at 2.295 million tonnes, which is 52 million tonnes less than what was produced in 2011.

"This forecast is some 4 percent below the estimate in FAO's previous report in July, largely reflecting the worsening of maize production prospects in the United States because of the widespread and severe drought," FAO said in its September update.

Global cereal utilisation in 2012/13 is forecast at 2.317 million tonnes, down marginally from the previous season and 2 percent below the 10-year trend.

High grain prices are seen as curbing demand, especially for production of fuel ethanol from maize.

World production of coarse grains - maize, barley, sorghum, millet, rye and oats - is projected at 1.148 million tonnes, down 17 million tonnes, from what was produced in the previous year.

The anticipated fall mainly reflects a smaller maize crop, which is expected to decline to 864 million tonnes in 2012, 20 million tonnes less than in 2011.

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