World cereal output to set new record this year: FAO

World cereal production is set to hit a new high this year because of favourable climatic conditions in major growing countries, including India.

Data compiled by the Food and Agricultural Organisation (FAO) of the United Nations showed world cereal production would hit 2,479 million tonnes (mt) this year, an estimated increase of 7.2 per cent.

The FAO puts world wheat output in 2013 at 704 mt, an increase of 6.8 per cent, which more than recoups the previous year's reduction and represents the highest level in history.

By far, the bulk of the increase in wheat production this year is expected to originate in Europe, as overall prospects remain favourable in the European Union and outputs in the major producing Commonwealth of Independent States are forecast to rebound sharply from drought-reduced levels in 2012. The outlook is also positive in Canada, Australia and Argentina - other major exporters - and in most other key wheat producing and consuming countries. The main exception is the US, where wheat crop growth has been hindered by adverse weather conditions - drought in particular - this season.

World rice production in 2013 is forecast to expand by 1.9 percent to 500 mt (milled equivalent) with strong gains in all regions except Europe and North America. However, prospects are still very provisional, as July and August are critical for the development of the northern hemisphere main paddy crops.

World production of coarse grains in 2013 is forecast at about 1,275 mt, an increase of 9.7 percent from 2012. Latest estimates confirm increased harvests in Argentina and Brazil, the two major producing countries in the southern hemisphere, while a smaller crop has been harvested in South Africa.

Production growth this season could be dampened by expectations of falling prices and recent policy changes that may encourage farmers to shift to other crops.