WorldWatch:

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Tuesday, May 13, 2008Print This Page
Myanmar’s Food Bowl Devastated
MYANMAR - The UN Food and Agriculture Organization (FAO) today called for US$10 million to assist poor farming and fishing communities in Myanmar devastated by cyclone Nargis.



The five worst-affected areas - Ayeyarwady, Yangon and Bago Divisions, and Mon and Kayin States - are considered Myanmar’s food bowl, producing much of the country’s staple food of rice and fish, and the overall food security situation in Myanmar is seriously threatened, FAO said.

FAO’s call for funding is part of a UN flash appeal for the country that covers emergency relief and rehabilitation activities in the agricultural, fisheries and livestock sectors over the next weeks and months.

While the second crop of the 2007 rice season was fully harvested before the cyclone hit and no major crop losses are expected in the region, rice already harvested for household consumption was most likely damaged by the storm surge, adding to the precarious food security situation of poor coastal families, FAO said.

Inland and coastal fisheries, poultry and livestock were also either damaged or lost, according to FAO. An estimated 2 million households were affected, meaning that a significant number of farming and fishing families are in need of urgent assistance.

“The hardest hit villages lost all their farming assets, as well as the food stored for the rest of the year,” said Anne M. Bauer, Director, FAO Emergency Operations and Rehabilitation Division. “Add to this the burden of rebuilding their destroyed houses and it is safe to say that these poor farmers will not have sufficient resources to purchase seed, fertilizers and other inputs, protect surviving livestock and replace lost ones, and pay for on-farm labour during critical phases of the farm cycle. Funds are urgently needed to help them resume food production, restore food availability and reduce the need for high cost and unsustainable relief.”

Time running out
According to FAO’s Regional Representative for Asia and the Pacific, He Changchui, time is running out to prepare for the main rice planting season starting in early June with the onset of the monsoon rains.

“It is crucially important to mobilize the right type and volume of rice seeds, fertilizer and other production inputs quickly, in order to resume agricultural productivity in a timely manner,” he said.

In Myanmar, people consume on average 20 kg of rice per month compared with 16 kg in Viet Nam, 10 kg in Thailand and 7 kg in Asia as a whole.

As much fertile agricultural land was inundated with sea water, another FAO priority will be to analyse soil salinity and review damage to irrigation and capacity for draining agricultural lands to make them suitable again for farming.

Relief and rehabilitation activities
FAO’s proposed activities will help around 100 000 of the worst-affected farming and fishing households, particularly women and children, to rebuild their livelihoods through the provision of agricultural inputs such as rice and vegetable seed, fertilizer, fruit tree seedlings, farming tools, and technical know-how.

The cyclone-hit areas are key livestock producing regions - comprising roughly 50 percent of national poultry production and 40 percent of pig production. To rehabilitate the damaged livestock sector, FAO plans to distribute draught cattle, goats, pigs and poultry to replace lost, sold or consumed livestock and supply veterinary medicines and vaccines to improve animal health and protect surviving livestock.

FAO also plans to help the worst-affected fishing families resume fish production through the provision of fishing gear, nets, fish processing equipment, fish seed and fertilizers, and technical support.

Needs assessment under way
FAO is fielding its first damage and needs assessment mission this week. Two senior FAO staff, including a Regional Emergency and Rehabilitation Coordinator, are joining FAO’s resident team in Myanmar to lead the assessment mission.

Cyclone Nargis has affected the same areas in Ayeyarwady Division that were hit by the 2004 tsunami, but this time around, the impact is believed to be far more severe.

The area struck by the cyclone has some major fishing ports and landing sites. Early satellite pictures show significant damage to fishing vessels in harbours, and damage to infrastructure such as landing facilities and fish storage and preservation facilities is likely, FAO said.

The fate of the vessels at sea when the cyclone hit is currently unknown. Myanmar does not have an early warning system for cyclones. Although fishermen are generally aware of weather conditions and do not go out to sea if storms are expected, fishers on small vessels may not have received warning in time.

The coastline of Myanmar is over 3 000 km long and Ayeyarwady Division occupies the delta region of the Ayeyarwady River. The area has numerous rivers and channels and much of the transport in and around the area is by boat.

As transport and communications are extremely difficult, FAO expects to have a preliminary assessment within ten days, and a fuller picture of the situation within one month.

Short- and medium-term recovery plans will be prepared by FAO, and assistance will be provided to the Government to implement these emergency and rehabilitation plans. These plans will also take account of the need to address the food crisis in line with FAO’s Initiative on Soaring Food Prices (ISFP).

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Animal Feed & Animal Nutrition News Feed prices result in record pig prices
// 14 may 2008

Pig prices in Taiwan have reached a nine-year high. As a result of the high feed prices, the animals were sold yesterday for NT$7,010 per 100 kilograms (€146.7).

 
Prices of pigs have been going up at a rapid pace. Just in the bottom half of last year, pigs were sold for NT$4,700 per 100 kilograms (€98.3). In February, prices shot up to NT$6,000 (€125.5), before going up to an average of NT$6,491 (€135. for the month of April. Just over the first few days of May, prices went up to NT$6,886 (€144) and reached NT$7,012 over the weekend, breaking the NT$7,000 level.

Things did not improve much yesterday -- the first trading day of the week after the Monday close of traditional markets island-wide -- as pigs were sold at NT$7,010 per 100 kilograms.

The last time pig prices broke the NT$7,000 level was in the summer of 1999, due to a mass culling of pigs in the aftermath of the foot-and-mouth disease that broke out in 1997.

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Animal Feed & Animal Nutrition News Contaminated pig feed taken off shelves
// 14 may 2008

In imported feed supplement for pigs has been withdrawn from sale in Australia. The supplement, imported from China contained high levels of lead.


Testing revealed pigs in six Western Australian piggeries had high levels of the metal in their systems. Those piggeries have been put into quarantine and will remain so for at least another month. Another 60 piggeries which also use the same feedstock are being closely monitored to ensure the pigs have not been affected.

The Agriculture Department's Dr Ashley Mercy says the feed supplement has been recalled and will no longer be sold in WA, but says feed manufacturers need to check what is coming into Australia.

"To make sure their quality assurance programs that they've got in place include checking the analysis that they get, and even to go to the extent of maybe they want to analyse the ingredients to make sure that it matches what it says on the certification certificate," he said.

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Animal Feed & Animal Nutrition News Uproar in UK over pig remains for poultry
// 13 may 2008

Pig and poultry farmers are not sure if they want an opportunity to cut costs which could be coming their way, reports Yorkshire Post.

 
The EU is preparing to allow the remains of pig carcasses to be used in poultry feed, which would save UK farmers millions of pounds as cereal prices soar. This, however, has caused uproar. The practice of using pig remains in chicken feed was banned in Europe after the BSE crisis 10 years ago.

Enormous reaction
It has been reported that when the BBC's Farming Today programme reported on one of the possibilities which are now up for discussion again – feeding pig leftovers to hens – the reaction was enormous.

Reportedly, moderate vegetarians said they could not eat eggs from birds fed on meat. Additionally, a spokesperson for 2 mln Muslims in Britain (and 25 million in western Europe) said they could not eat the eggs or the flesh of any bird fed on animal protein of any kind – and it would only make it worse if it was pork.

Some halal butchers once had special sources for suitable chickens and eggs, up until BSE exposed modern farming practices, reports the Yorkshire Post. Now they are good customers for mainstream farm production. However, a change back to the old ways would put them on the spot. And they are not the only customers who might be lost. Most people were horrified to find out about the recycling of slaughterhouse waste to farms before BSE. And a lot of hostility to the practice remains.

More lost than gained
A Yorkshire pig farmer commented this week: "Pigs are omnivores. If you buy pig-meat from outside the EU, it has almost certainly been fed with meat. And it probably makes scientific and economic sense for us to do it. But the danger is that we would lose more than we gained, because of the public reaction." A poultry farmer said much the same about hens.

The jury is still out
According to the National Farmers Union, "We want a level playing field for our members to operate efficiently and competitively. However, the jury is still out. We definitely don't want to turn out products consumers don't want."

The BBC said new rules could apply by the end of this year but that looks unlikely. The EC's Standing Committee on the Food Chain & Animal Health will not consider the issue until it is satisfied that the feed industry has foolproof tests.

The RSPCA's food certification arm, Freedom Food, said it would not approve meat-fed meat. Additionally, the Soil Association said meat-fed meat would not be considered organic.

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Thursday, May 15, 2008Print This Page
Relief Estimates for Cyclone Hit Livestock
MYANMAR - In parallel to ongoing priority humanitarian aid assistance, Relief Web says that we need to start looking at the longer term, in particular as time is running out to secure planting in June of rice seeds for the main 2008 rice harvest.



If were are not able to do that in a timely fashion, then the food and nutrition problems in the medium term will not go away.

Each US$1 spent on agriculture between now and the end of the year, represents a saving of US$10 for food aid in 2009.

Progress achieved
Yesterday a first meeting was held in Yangon of the agricultural cluster chaired by FAO with the participation of senior government officers working in agriculture, livestock and fisheries, and forestry. Fifty participants attended. Also present was UNDP and local representative from donors (ECHO, DFID and JICA), international and local NGOs such as CARE, CESVI, WCM, German Agro Action, GRET, TRIANGLE, IDE, ICVA, AMURT.

The short and medium term needs in each of these sectors were provisionally estimated by the government as follows:

Agriculture estimated at $243 million – for rice seeds, fertilizers, rehabilitation of embankments and irrigation schemes, etc. The cyclone hit 5 states which are predominantly agricultural societies. The 5 states produce 65 percent of the countries rice, and have about 50 percent of all irrigated areas.

Livestock estimated at $20 million – restocking of dead animals, vaccines, feed, rehabilitation of animal shelters, etc. The 5 affected states are famous for livestock production - having roughly 50 percent of national poultry production and 40 percent of pig production.

Fisheries – no estimates yet, but in view of huge damages, the costs will be significant. Marine fishery in Myanmar employs approximately 26 000 small boats operating in coastal areas and some 1 900 offshore fishing vessels (2001 data). The marine fisheries sector produces 1.4 million mT, which represent over 55 percent of the country’s fish supply.

Forestry – no data on damages yet.

FAO in action
FAO has already sourced rice seeds for procurement from inside Myanmar, while for fertilizers procurement needs to be done outside Myanmar.

A team of three FAO international experts and one local staff member will visit Bogale - one of the worst hit coastal states - tomorrow on the invitation of the ministry of forestry.

One additional FAO international emergency expert will join FAO in Myanmar on Saturday 17 May.

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Chinese grain unaffected by earthquake
// 15 may 2008

China's deadly earthquake on Monday did not cause damage in the grain reserve stockpiles in quake-ravaged southwestern China.


The China Grain Reserves Corp. said no losses or casualties were reported at its sites in Sichuan and Gansu provinces or Chongqing, the state-run Xinhua news agency reported. An afternoon quake measuring 7.9 on the open-ended Richter scale struck in Wenchuan County, leaving upwards of 15,000 dead and tens of thousands injured, buried or missing.

China Grain said some of its warehouses suffered damage, including beam and wall cracks. Premier Wen Jiabao said earlier this year China had as much as 200 million tons of grain in its reserves. Beijing ordered reserves distributed in quake-hit areas and directed local governments to keep an eye out for price-gouging.

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Animal Feed & Animal Nutrition News Estonian farmers to pay for cow gases
// 16 may 2008

Estonian farmers will now have to pay for their cattle’s contribution to climate change. A new 'digestive gases tax' is introduced to compensate for the greenhouse gas that cows produce during their life, reports MIGnews.com.



An ordinary cow’s daily digestion results in an estimated 350 litres of methane and 1,500 litres of carbon oxide released into the atmosphere. Experts believe farms account for as much as a quarter of Estonia’s greenhouse gas emission. Opposition parties called the new tax 'unprecedented for the European Union'.

Source: Russia Today

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Animal Feed & Animal Nutrition News BPEX focuses on pig industry troubles
// 16 may 2008

Seeing wheat costs double has prompted many British producers to get out or at least scale down dramatically – as was shown by the cull sow figures running at some 40% above the level they were this time last year.


Speaking at this week's British Pig and Poultry Fair, British Pig Executive (BPEX) chief executive Mick Sloyan reminded his audience that since last August the average retail price of pork and pork products has risen by almost ₤1 (€1.26) a kg while at the same time, the price paid to producers has gone up by just ₤0.10 (€0.13) a kg. That is against a background of rocketing feed prices with the cost of wheat double what it was this time last year and soya going up dramatically.

Identical problems
Sloyan said that everywhere in North Western Europe, producers are facing the same problems, mainly caused by increasing demand to feed in India or China, poor harvests, drought and competition from biofuels.
Sloyan said: "All this work has helped to achieve a much-needed rise in retail prices. The basket price for pork, bacon and ham from the big four retailers (Tesco, Asda, Sainsbury's, Morrisons) which we monitor each week shows an increase of nearly ₤1 a kilo at a time when the price paid to producers has risen by just 10 pence. It makes you wonder where all the money has gone?"

Strategic view
He continued, "I believe that if retailers take a strategic view of their business and ensure sufficient money gets down the chain to pig producers to cover their costs, then everyone will benefit." "Consumers will not need to pay much more, retailers will continue to make a profit and most important of all, we will be able to meet continuing demand of British consumers for top quality, high welfare pork, bacon, ham, sausages and pies," Sloyan said.

At the Pig and Poultry Fair, the BPEX even received support from His Royal Highness Prince Charles, who sent his 'warmest good wishes' to all exhibitors, adding that he prayed that 'in due course the fortunes of our pig farmers will be transformed'.

Many initiatives
BPEX has been working hard on many fronts to tackle the crisis with technical help for producers and a major publicity campaign aimed at increasing the returns to producers. The BPEX launched a new feed price area in its website, for better help and information. In addition, there is a paper looking at alternative feeds and what effect they can have and finally practical day-to-day advice on improving efficiency.

Last year, a song was recorded by pig farmers and producers also rallied up to the Houses of Parliament in London.

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Animal Feed & Animal Nutrition News China earthquake damages pig production
// 19 may 2008

The earthquake in China which claimed thousands of human lives has also caused enormous damage to the agricultural sector – mainly related to poultry and pig production. The great fear now is the spread of disease, the Dutch agricultural newspaper Agrarisch Dagblad reports.


According to the Chinese ministry 12,5 million pieces of livestock have died as a result of the earthquake, mainly poultry. Also approximately 792,000 pigs in the province Sichuan have been killed by the earthquake. Sichuan’s pig herd totals 60 millions animals.

Warm season
The disaster occurred just before the beginning of the warm season, where diseases such as Classical Swine Fever (CSF) and blue-ear disease (PRRS) in Sichuan were in circulation. The structural damage, and bad accessibility caused by the earthquake along with hygiene standards have increased the chances of diseases spreading.

"Prevention of contagious diseases is one of our biggest priorities in the relief efforts," according to the Chinese government officials.

The horticultural sector has also been hit hard. According to official figures 15% of production and 50,000 greenhouses in the region are also damaged. The damage on irrigation systems will over time have huge effect. The fear is that large areas of rice production will dry up.

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Food and energy crop zoning proposed
// 20 may 2008

Closer monitoring of world demand is essential to defining areas for food and energy crops in order to ensure food export stability and also to promote food as a strategic product to swap for oil, says Thai Food Processors Association president Vilai Kiatsrichart.


She adds that without proper zoning, increased cultivation of energy crops can jeopardize raw material supplies for the food industry.

Thailand, she says, has about 130 million rai of farmland, of which 63 million rai are rice fields while 17.4 million rai are used for crops, mainly cassava, sugarcane and oil palm, with both energy and food applications, with the remaining land farmed for fruit and other products.

"Without proper farmland zoning, defining areas for food and energy crops to ensure food export stability and also promote food as a strategic product to swap for oil, may jeopardize raw material supplies for the food industry.

"We believe food exports for all of 2008, both in terms of value and volume will remain strong, given rising prices per unit following higher raw material and production costs. But what we are now most concerned about is the availability or raw materials supplied to the food industry, which has made it tough for exporters to forecast their sales in the longer term."
 animal feed newsletter

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DSM to supply vitamin premixes in China
// 23 may 2008

DSM enters into a strategic partnership with Yunnan Shennong Agriculture Group to supply its Optimum Vitamin Nutrition (OVN®) Premix in Yunnan Province in South West China.


The new arrangement covers the production of pork in Yunnan Province, and a new manufacturing facility will come on line at Shennong Food Industry Park by August. The objective is to produce 500,000 tons of OVN® feed per annum within three years.

DSM already has a strategic agreement with Conti Chia Tai Group in Guangdong for the production on OVN® eggs. "The OVN approach allows closer control of vitamin and trace element nutrition and can be tailored for egg, poultry meat, pork, fish and milk production," commented Dr. J. Nathan Bird, VP Animal Nutrition & Health, China. In order to be able to implement this project the Yunnan Shennong Agriculture Group has been through an extensive HACCP qualification program for the whole pork production process.

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Australian winter crops boosted by rain
// 22 may 2008

Widespread rain across South Australia state in recent days has improved the prospects for the 2008 winter cereal and oilseed crop, barley exporter ABB Grain Ltd said. ABB Grain's managing director Michael Iwaniw said most regions in the state had received enough rain to begin planting, to capitalise on strong world prices.


"Now we are in a near-optimum sowing window, giving optimism for a large production season as growers have indicated their intention to sow all available acres this season," he said.

The Australian Bureau of Meteorology was forecasting at least average rainfall in South Australia for the next three months, he added. World wheat and barley supplies were still at significantly low levels, he said. ABB plans to expand into wheat exporting with de-regulation of the Australian industry on July 1.

South Australia produces around 15 percent of Australia's national wheat crop and 30 percent of the national barley crop. Australia is forecast to produce a record or near-record wheat crop of 26-27 million tonnes in 2008/09, although this has been thrown into doubt by dry weather in the main eastern growing state of New South Wales, which missed out on last weekend's rainfall. Last year, drought conditions limited the wheat crop to just 13 million tonnes. The forecast barley crop for 2008/09 is about 9 million tonnes, up from 5.9 million tonnes last season.

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MEAT AND MEAT PRODUCTS
PRICES 

Sustained increases in production costs, notably feed, in major producing countries, suggests that meat prices could come under greater pressure in 2008

Preliminary estimates indicate that the FAO International Price Index of meat products reached its highest level of 136 points (1998-2000=100) in April 2008, continuing its recent upward trend that began in June 2006. The main reasons for this development are: higher feed costs, the depreciating US Dollar, and the rising demand for meat largely fuelled by economic growth in developing countries, particularly in Asia. Although, individual meat categories have exhibited different developmental paths in the past because of differences in feedstuffs used, feed conversion efficiencies, biological production cycles, as well as differences in contractual agreements, the trends for all since 2006 have been in the upward direction. Despite this, however, meat markets have not yet experienced price hikes of comparable magnitude to those observed in grains, oilseeds and dairy product markets. But sustained increases in production costs, notably of feed, in major producing countries, that are reducing the profit margins of meat producers, suggest that prices of meat products could come under greater pressure. The delay in the response of meat markets to developments that are taking place in the feed markets is partially due to typical livestock cycles, as well as recurring animal diseases.

Ovine prices climbed almost 17 percent over the first four months of 2008 compared with the same period a year ago, mostly reflecting the attempts of Australian sheep producers to rebuild their flocks through reducing slaughtering. During the same period, FAO's bovine price index rose by almost 7 percent, due to rising global import demand and limited export supplies from Argentina, Australia, Canada and New Zealand. International pigmeat prices experienced a similar increase, despite reaching the peak of the hog cycle in some of the large producing countries, such as Canada, European Union and Mexico. The largest increase in prices has, however, been observed for poultry products. The increase was slightly more than 28 percent over the same period as above, reflecting the increase in feed and energy that make up the largest portion of variable production costs. It is interesting to note that 54 percent of the increase in meat production for 2008 will come from poultry meat, as it continues to remain the most affordable meat.

Table 8. World meat markets at a glance
  2006 2007 estim. 2008 f'cast Change: 2008 over 2007
  million tonnes % 
WORLD BALANCE         
Production 271.5 274.7 280.9 2.3
Bovine meat 65.7 67.2 68.0 1.1
Poultry meat 85.4 89.5 92.9 3.8
Pigmeat 101.7 98.8 100.6 1.8
Ovine meat 13.3 13.7 14.0 2.0
Trade 21.4 22.5 23.1 3.0
Bovine meat 6.8 7.1 7.2 1.0
Poultry 8.5 9.2 9.6 4.3
Pigmeat 5.0 5.0 5.3 5.2
Ovine meat 0.8 0.9 0.8 -5.9
   
SUPPLY AND DEMAND INDICATORS   
Per caput food consumption:         
 World kg/year 41.6 41.6 42.1 1.1
 Developed kg/year 81.1 82.4 82.9 0.7
Developing kg/year 30.7 30.5 31.1 1.8
           
    2006 2007 2008 Change:
Jan-Apr 2008
          over Jan-Apr 2007
FAO Meat Price Index         %
(1998-2000=100)   115 121 131* 10

* Jan-Apr 2008


BOVINE MEAT 
Bovine markets are recovering from weather shocks and import bans 

World production of bovine meat rose by 2.3 percent in 2007, and is projected to rise a further 1.1 percent in 2008 to 68 million tonnes. All of the increase in production will take place in developing countries, which now account for 56 percent of the global total.

In North America, bovine meat production is forecast to remain virtually unchanged. The increase in output in the United States will offset a 6 percent decline in Canada. The strong reduction expected in Canada is due mainly to the implementation of the Country of Origins Labelling (COOL) regulation by the United States, its major international market, the United States. The increase in the United States beef output is in part due to its depreciating currency, has increased its competitiveness. Moreover, high supplies of distiller-dried grains from the production of ethanol have helped to lessen the impact of higher feed costs.

In 2007 South American beef output increased by a healthy 5 percent, although the increase in 2008 is expected to be less than 2 percent. This reduction in the growth rate is due to developments in the two main producers in the region. In Brazil, the largest producer in the region, the 5 percent growth observed over 2007 is expected to be reduced to 2.5 percent in 2008, mainly as a result of the new restrictions imposed by the European Union on imports from the country due to product safety concerns related to animal diseases. In Argentina, on the other hand, production is expected to decline by 1 percent in 2008, reversing the 6 percent growth observed during the previous year, depressed by the imposition of higher export taxes and restrictions. These policies are changing the relative profitability of crop and livestock production, encouraging the producers to shift pasture areas into crop production and thus contributing to the decline in production of bovine meat. However, good pasture conditions in Chile, Columbia, Paraguay and Venezuela are expected to boost production by 5 percent. Shortages in replacement cattle have constrained the increase in Uruguay's production to less than 1 percent.

Bovine meat production in the European Union remains on a downward trend, as animals are being retained to increase the size of the dairy herd, following the increase in milk quotas. However, reduced imports from Brazil should stimulate the industry somewhat, limiting the decline in production to less than 1 percent.

Cattle slaughter in Australia is expected to contract by 3.3 percent in 2008, as its herd is in the rebuilding phase. Most of the production decline is expected in the grain-fed peak sector, following losses sustained by the feedlots due to higher feed costs in 2007. New Zealand's production numbers will increase slightly in 2008, stimulated by favourable product prices.

Steady herd expansion, improved genetics and feeding practices, as well as continued government support, are expected to sustain production increase of more than 3 percent in China. Bovine meat output is increasing also in India and Pakistan, in response to growing domestic demand. The increase also reflects the aging of their dairy herds, which has boosted the slaughter of older dairy cows.

International trade in bovine meat is forecast at 7.2 million tonnes in 2008, up 1 percent over 2007. The market continues to recover from consecutive droughts in Australia and from the Bovine Spongiform Encephalopathy (BSE) incidents in North America that had resulted in the imposition of bans by many importers. As these are being progressively lifted, trade in beef is resuming a more normal pattern.

Among the major importing countries, shipments to Japan are set to decline slightly, largely reflecting lower exportable supplies of grain-fed beef from Australia and continuing import restrictions on products from the United States. The foreseen increases in the consumption in the Republic of Korea will be partly met through increased imports, as BSE concerns dissipate. In the United States, increased domestic slaughter, coupled with a weaker US Dollar, may depress imports by 4 percent. Purchase of beef by the European Union will decline substantially, due to a partial ban on beef imports from Brazil and inability of other South American suppliers to fill the gap. Imports by the Russian Federation are likely to continue rising to compensate for a falling domestic production.

As far as bovine meat exports are concerned, those from New Zealand are expected to grow in 2008 despite a strong New Zealand Dollar. Shipments from Brazil will mirror production growth and be destined to non-traditional markets to offset import restrictions imposed by the European Union. While exports from Argentina are set to decline , shipments from Paraguay and Uruguay are expected to increase. Buffalo meat exports from India are likely to will rise in 2008, in response to strong import demand from Indonesia, Malaysia, the Philippines and countries in the Near East.

The strong Euro, high internal prices and decreased imports from Brazil, however, will discourage exports from the European Union. Canada's beef shipments are also expected to fall, negatively affected by the introduction of the Country of Origin Labelling legislation in the United States. Exports from the United States are anticipated to rise, sustained by a weak dollar and the progressive lifting of import bans by its traditional importing partners.

PIGMEAT 
Pigmeat production to recover in 2008 

Global pigmeat production is forecast to increase by almost 2 percent to 101 million tonnes after a 3 percent decline in 2007, which was largely the result of the impact of massive culling of nearly 1 million pigs following the outbreak of the Porcine Reproductive and Respiratory Disease in China, the world's largest pigmeat producer. This year, output in China is forseen to expand more than 1 percent, but recovery is being impeded by snow storms early in the year that destroyed 800 thousand pigs, particularly in back yard operations. In order to promote recovery, a number of subsidy, insurance and vaccination programmes have been implemented. In Canada and the European Union, where output last year was at cyclical highs, with low prices, production expected to decline in 2008. Viet Nam's production is also affected by PRSS and massive culling of all infected animals will reduce the growth in production for 2008.

In South America, an increase in pigmeat production is anticipated in virtually all producing countries for the fourth consecutive year. Argentina, Brazil and Chile, which have ample feed supplies, are the main contributors to the 4 percent output expansion projected for the region. In the Russian Federation, production is set to grow by more than 6 percent in 2008 as the pig population is continually increasing, aided by government support policies aimed at boosting quality and volume of domestic production and reducing dependency on imports. Pigmeat output in Australia remains stable as a result of a combination of drought-induced high grain prices and record imports driven by the strengthening of the AUD. In the United States, pigmeat production will increase as a result of favourable conditions in 2007, which were encouraged by the depreciation of the dollar. It's industry has also adopted a new vaccine that has lowered hog losses and increased productivity.


World trade of pigmeat is estimated to increase by 5.2 percent to 5.3 million tonnes in 2008. A continuing development for the sector in 2008 is the increased presence of China in the market as a buyer, as the country continues to be crippled by a lack of pork supplies following the outbreak of PRSS. China, this year is expected to import 150 000 tonnes of pork in an attempt to reduce the pressure on domestic prices. Purchases by Japan are expected to increase by 2 percent, in line with increased domestic demand and a reduction in domestic production brought by high feed costs. By contrast, shipments to the Republic of Korea are expected to increase, especially from Chile benefiting from lower import duties agreed to in the Korean-Chile Free Trade Agreement (FTA), sustained by rising domestic demand. Pigmeat deliveries to the Russian Federation, which continue to be subject to tariff rate quotas, are expected to remain stable, a reflection of large production gains consistent with prevailing government policy to stimulate output.

As for pigmeat exports, sales from Brazil and the United States are forecast to rise, partly a reflection of increased shipments to China and Japan. By contrast, reflecting strong currencies and higher feed costs, exports from Canada are now anticipated to decline while those from the European Union will remain stable in 2008. Imports of pigmeat by Mexico are to decrease substantially this year due to increasing consolidation of the industry, which helped raise production.

POULTRY MEAT 
Poultry competitiveness in converting feed into meat is favoured when feed prices are high 

Animal diseases, such as Avian Influenza (AI), continue to shape poultry trade patterns. Nevertheless, in developing countries, sustained high economic growth will continue to increase demand for meat, especially for low priced protein-rich meats such as poultry. The cost efficiency of poultry production can be largely attributed to the relatively high feed-to-meat conversion ratios that can be achieved when compared with the production of other types of meat. This implies that as the prices of animal protein rich products rise because of higher feed prices, as is currently happening, consumers tend to prefer relatively cheaper meat types and cuts. In line with these expectations, global poultry meat production in 2008 is projected at 93 million tonnes, almost 4 percent higher than last year. The growth is expected in all regions of the world. Poultry production in the United States is expected to increase by more then 2 percent. Canada's effort to contain its 2007 AI outbreak has been successful and the output is expected to increase slightly. Production may increase by 6 percent in South America. Argentina, Chile and Colombia will achieve 10 percent increases in production, while the growth rate in Brazil, the largest producer in the region, is expected to be about 5 percent. Adjusting to growing domestic consumption and export demand, Thailand broiler production is expected to increase by more then 6 percent in 2008. This year, despite recurring outbreaks of AI, China is anticipated to increase its poultry output through measures that improve feed conversion into meat. Most other major poultry producers, namely Australia, Indonesia, the Islamic Republic of Iran, the Philippines, the Russian Federation, South Africa and Turkey, are expected to increase their poultry production in 2008 in response to improved domestic demand. In Africa, poultry output is anticipated to increase by 1 percent, mostly reflecting higher production in North Africa. Despite the resurgence of AI in parts of the European Union, prospects for poultry production in 2008 remain relatively stable. Competitive prices, with respect to other meats, consumer preference for white meat and increased use in food preparations still favour poultry meat as in 2007. On the other hand, India and the Republic of Korea have increased poultry culling in order to stop the spread of the H5N1 bird influenza virus. This is expected to lower production in 2008 by 3 and 2 percent, respectively in these countries.

Trade in poultry meat is projected to rise by 4 percent to 9.6 million tonnes, due to increased import demand. Half of that growth is expected to originate in Asia, especially China where consumers are substituting broiler meat for pigmeat, the prices of which have been relatively higher. The Philippines and the United Arab Emirates are expected to increase poultry imports substantially to meet the domestic demand. Saudi Arabia, which is expected to decrease import tariffs for frozen poultry to help control food price inflation, will also increase poultry imports by 2.6 percent. The European Union is expected to become a net importer in 2008 with Brazil as the major supplier. In 2008, imports will increase by 1.4 percent paying full over quota duty because high domestic prices will still make it profitable. Imports by Turkey for 2008 are anticipated to recover from the 2006 contraction caused by AI reflecting consumer confidence returns. The Russian Federation is also increasing its imports of poultry meat as consumer demand continues to expand because of growing income and the shortage of supplies of other meat. Imports by Japan, on the other hand, are anticipated to decline by 1.6 percent.

 As for poultry exports, larger sales of chicken meat by Brazil are expected to account for 38 percent of the global expansion in poultry trade. Exports from the country are now anticipated to grow by 4 percent, to almost 3.6 million tonnes, in response to strong import demand from countries in the European Union, the Near East countries, such as Saudi Arabia and the United Arab Emirates and Asia particularly Hong Kong and Japan. The Thailand broiler industry anticipates that exports of cooked chicken meat will continue to grow at least by 7 percent in 2008, in line with strong demand from the European Union and Japan despite recurrence of AI this year. Thailand has devised an approach, referred to as "compartmentalization", the goal of which is to convince major importing countries to import from those areas meeting stringent biosecurity measures, regardless of the country's overall AI status. The forecast for exports from the United States points to an expansion of 4 percent from last year. The United States accounts for one-third of the global expansion in poultry trade, despite the growing competition from Brazil on Asian markets. Its favourable exchange rate has kept the United States' exports competitive in Chinese and the Russian Federation import markets.

SHEEP AND GOAT MEAT   
Global ovine output forecast to increase despite substantial production decline in Oceania   

Global ovine production is forecast to rise by 2 percent to 14 million tonnes in 2008, particularly due to a higher output in China, the Islamic Republic of Iran and Pakistan. Output is also expected to rise in Africa, especially in Egypt, Morocco and the Sudan, accounting for almost two-thirds of the increase in production of the continent. North American output should increase, particularly in the United States, by more than 1.9 percent, as the income growth in the Hispanic community improves the demand for lamb. By contrast, production is anticipated to contract in most other developed countries. Despite improved weather conditions in Australia, lamb output should fall in 2008, mainly because of animal retention for flock rebuilding. Drought in the North Island of New Zealand and overall poorer climatic conditions may keep 2008 production even with that of 2007. Production in the European Union should continue to decline in 2008 by about 1.4 percent, reflecting the lingering effects of the decoupling of annual premiums for ewe numbers in major producing countries.

World exports of sheep and goat meat in 2008 are estimated to decline by 6 percent to 825 thousand tonnes. Overall sheep meat exports from Australia are now set to contract in 2008 by 9 percent, restricted by tighter supplies and a strong AUD. A similar situation is also expected for New Zealand. Among the major ovine meat importers, purchases by the United States are forecast to increase by 2 percent, driven largely by increased consumer demand. Lower domestic demand, partly caused by relatively high prices of sheep meat, should keep imports of the European Union at the same level of the previous year. It nevertheless remains by far the most important destination of trade in ovine meat.
 

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Timor's Ramos-Horta Says Farm Subsidies Will Help Food Security

By Jason Gale

May 26 (Bloomberg) -- East Timor President Jose Ramos-Horta said his country must use subsidies to bolster agriculture and protect its food security in the face of soaring import costs.

East Timor, Asia's youngest and least-developed nation, can be ``mostly'' self-sufficient within five years, Ramos-Horta, 58, said in an interview in Singapore today. About two-thirds of the rice consumed in the country is bought from Vietnam and Thailand.

Cheaper food from overseas can't be relied on because rising fuel prices are ratcheting up transport costs and major rice- producing countries, such as China and India, will need more to feed their own people, leaving less for export, Ramos-Horta said.

``Food security must be priority No. 1 for us,'' he said. ``For our own food security, our survival, our independence, we should spend more money -- including subsidizing our farmers -- to produce more.''

The Nobel laureate, who served as prime minister from 2006 until his inauguration as president last year, was shot and almost killed in a Feb. 11 rebel attack.

``At the time I was prime minister I said I am going to subsidize our agriculture sector,'' he said. ``We have to. That would make us independent, and eventually it will be cheaper.''

Ramos-Horta said that using subsidies to protect farmers and encourage domestic agricultural production may rankle multilateral finance agencies, such as the World Bank and International Monetary Fund, which advocate free trade as a mechanism for lowering food costs.

``If we do the opposite of what they say, I think that will be about right,'' he said.

Import Surge

The cost of importing rice has more than doubled this year as countries including Vietnam and China curbed overseas sales to protect domestic supplies. Governments worldwide may spend a record $1.035 trillion on imported foodstuffs in 2008 because of higher commodity prices and escalating transport costs, the Food and Agriculture Organization of the United Nations said in a report last week.

In East Timor, which derives about $100 million a month from its petroleum reserves, farmers are offered incentives to expand crop production, and new roads and bridges are being built to bring food to consumers faster.

The government is considering building warehouses to store food in strategic areas around the country for emergencies to assist ``vulnerable people,'' said Ramos-Horta. About 40 percent of the nation's 1 million people live on $1 or less a day.

`Matter of Decency'

Ensuring the availability of affordable food is ``a matter of decency and morality for the poor, but also a matter of stability and security,'' Ramos-Horta said. The poverty-inducing affects of food inflation ``will set back development efforts in developing countries at least 10 years,'' he said.

Food prices would have escalated more in East Timor had the government not stepped up imports of rice, corn and potatoes to bolster local supplies, the president said.

``With climate change, more industrialization and the development of countries like India and China, there will be less and less land available for agriculture,'' Ramos-Horta said. ``We have to quickly make ourselves completely independent in food.''

East Timor, formally known as Timor-Leste, was established in May 2002, ending 24 years of Indonesian control and three years of UN administration.

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U.S., Asia Express `Serious Concern' Over Oil Prices (Update2)

By Megumi Yamanaka and Yuji Okada

 June 7 (Bloomberg) -- The U.S. and Asia expressed ``serious concern'' over record oil prices one day after the market posted its biggest dollar gain ever, and urged consumer-nations to shift to alternative sources of fuel as energy costs rise.

Oil prices have reached ``unprecedented'' levels, officials from Japan, China, India, South Korea and the U.S. said in a joint statement issued after a meeting in Aomori in northern Japan today. Crude oil climbed $10.75 in New York yesterday to settle at $138.54 a barrel, its biggest one-day increase.

``There are few things we can do for the short term,'' U.S. Energy Secretary Samuel Bodman told reporters in Aomori today. ``There are things we can do on increasing efficiency and we are working on them.''

Prices more than doubled over the past year, sparking concern oil will fuel inflation and retard economic growth. The U.S. and the four Asian nations, together accounting for half the world's energy consumption, said today wider use of alternative fuels such as clean coal, nuclear power, and renewables will help bolster energy security.

Investing more in oil and gas to boost output capacity and greater effort in accessing petroleum reserves will also expand supplies of conventional fuels, helping to tame energy prices, according to the joint statement.

Cutting Subsidies

The governments of China and India, which sell fuels to domestic users below cost, were in agreement with the U.S., Japan and South Korea that ``a gradual withdrawal of fuel subsidies is desirable,'' the statement said.

India, Malaysia, Indonesia and Taiwan over the past month raised fuel prices and cut subsidies, in a move that may reduce Asian demand and slow global oil-consumption growth.

``This is the first time that we can agree on the necessity of abolishing fuel subsidies by steps,'' Japan's Trade Minister Akira Amari told reporters today. ``Each country has different reasons and contexts, so they cannot do that immediately.''

Prime Minister Manmohan Singh said India's fuel-price increase was ``inevitable'' in helping to protect government finances and narrowing oil refiners' losses. ``There are limits to which we can keep consumer prices unaffected by rising import costs.''

Scaling back on subsidies is a step forward in boosting energy efficiency and accelerating a quest for alternative sources, amid rising oil prices. Energy ministers from the Group of Eight industrialized nations, together with government officials from China, India and South Korea, are expected to set energy-conservation targets tomorrow when they meet in Aomori.

Saving Energy

Japan's Amari urged China and India, the world's fastest growing major economies, to join the International Partnership for Energy Efficiency Cooperation, which the G-8 plans to create by the end of this year.

``A key in setting numerical targets would be how much developed nations can accommodate the demands of developing countries in transferring conservation technology,'' Kenichiro Yamaguchi, chief consultant with the Global Warming Research Group at Mitsubishi Research Institute Inc., said this week.

Energy Ministers from the G-8 -- the U.S., Japan, Canada, Germany, France, U.K., Italy, and Russia -- will discuss the possibility of sharing alternative-energy technologies with China, India and South Korea. The 11 countries account about for two-thirds of global energy demand.

``Energy efficiency provides one of the most cost-effective short-term responses'' to record oil, the joint statement said.

To contact the reporters on this story: Megumi Yamanaka in Tokyo