World cereal output is likely to jump phenomenally this year even as wheat production is set to hit another record this year. | |
| However, record cereal output is unlikely dampen sky-rocketing prices globally as stocks are depleting to all-time lows thanks to robust consumption. |
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| According to the Food and Agriculture Organisation's first forecast for world cereal production in 2008, total cereal output is likely to increase 2.6 per cent to 2,164 million tonnes if the agro climatic conditions continue to be favourable. |
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| The bulk of the increase is expected in wheat, output of which is set to reach a record 647 million tonnes, up 6.8 per cent from 2007. Production in the European Union is tentatively forecasted at 137 million tonnes this year, up 13 per cent from last year. |
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| With the first of the major 2008 coarse grain crops already being harvested or close to maturation in several countries around the world, FAO tentatively forecasts global coarse grain output at 1,075 million tonnes, up 0.6 per cent. |
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| Stocks are fast dleting as consumption is fast outstripping production courtesy the burgeoning world population. |
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| According to FAO sources, global cereal output in 2007 stood at 2,108 million tonnes, representing a 4.7 per cent increase from 2006. World wheat output rose by 1.6 per cent to 606 million tonnes but the bulk of the increase was in coarse grains, production of which rose to 1,068 million tonnes, up 8.3 per cent year-on-year. Latest estimates put the 2007 rice output at 434 million tonnes (milled terms), a rise of 1 per cent up from 2006. |
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| Global cereal stocks are expected to fall 21 million tonnes, or 5 per cent, to 405 million tonnes, the lowest in 25 years, by the close of the season ending 2008. At this level, the ratio of world cereal stocks to utilisation falls to 18.8 per cent, down 6 per cent from the previous low in 2006-07. |
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| Wheat stocks are forecast at 144 million tonnes, down 9 per cent from their opening level. The sharp decline is even more notable in major exporting countries with their combined wheat reserves falling as much as 10 million tonnes. |
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| FAO attributes the reduced stocks to strong demand from major exporting countries where production in 2007 suffered due to exceptionally poor yields. |
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| Even in the United States, where wheat output increased in 2007, stocks are expected to fall to 8 million tonnes, 4 million tonnes less than last season. Inventories in EU are forecast to drop to 9.5 million tonnes, more than 3 million tonnes below the previous season's low, caused by a sharp production shortfall in 2007. |
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| Demand is forecast to exceed total supply this year in spite of a significant 8 per cent growth in world production in 2007 and 2008. |
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| The world stocks of coarse grains at the end of the 2008 season are forecast to reach 157 million tonnes, 5 million tonnes short of the opening level. Global paddy carryover stocks, meanwhile, are forecast to diminish by about 1 million tonnes to 103.5 million tonnes. |
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