Agro Perspectiva

Global wheat output set to fall 5%: FAO

02.09.2010 11:58 "Agro Perspectiva" (Kyiv) — Global wheat output is forecast to fall to 646 million tonnes this year, down 5% from 2009, the United Nations’ food agency said on Tuesday, cutting its earlier projection due to lower crops in drought-hit Russia. Russia’s wheat output is expected to fall to 43 million tonnes in 2010, down from an earlier estimate of 48 million tonnes and offsetting higher crops expected in the United States and China, Food and Agriculture Organisation said in an update on global cereal supply and demand situation. Expected wheat output shortfalls in drought-ravaged Russia, the world third-biggest wheat exporter last year, and concerns about export curbs in neighbouring Ukraine have set global grain markets on fire in the past couple of months. FAO, however, said this year’s world wheat output is set to be the third-biggest on record and has raised its forecast for 2010/11 world wheat use to 665 million tonnes, up 6 million tonnes from earlier estimate. The upgrade was mainly driven by expectations of higher feed use of wheat in Russia because of an extremely tight domestic barley situation, the production of which is forecast to fall 50% this year, the Rome-based agency said. FAO has cut its forecast for world wheat stocks ending in 2011 to 181 million tonnes from previous estimate of 188 million tonnes and down 9% from their 8-year high opening level. FAO has cut 2010 global cereals output forecast to 2,238 million tonnes from its previous estimate of 2,280 million tonnes due to smaller crops in Russia and other former Soviet Union states, but said it would still be the third-biggest crop on record and above the five-year average. Global maize output is heading to an all-time high of 845 million tonnes thanks to expected record crops in China and the United States, the FAO said. World barley production is forecast to fall 22% to a 30-year low of 129 million tonnes in 2010, driven mostly by a sharp cut in output in the former Soviet countries (the CIS) and in the European Union hit by unfavourable weather. World rice output is seen falling to 467 million tonnes in milled terms, 5 million tonnes lower than in the previous forecasts, mainly due to the flood damage to crops in Pakistan. Global food prices rose in August on the back of surging wheat and higher sugar and oilseeds prices, with the FAO Food Price Index climbing for the third month in a row and reaching a 2-year high. The index — which measures monthly price changes for a food basket composed of cereals, oilseeds, dairy, meat and sugar — averaged 175.9 points in August, the highest since September 2008, but is still 38% down from its peak in June 2008. In early August, international wheat prices soared to their highest levels since April 2008 on fears of global shortage fuelled by Russia’s output shortfalls, but have then fallen 11% on prospects of strong supplies in other countries, the FAO said. FAO’s Cereals Price Index rose to 181.6 points in August, the highest level since June 2009. The Sugar Price Index rose to 260.4 points, the highest level since March and the Oils Price Index rose to 193.0 points, the highest since September 2008.