The United Nation's Food and Agricultural Organization (FAO) today said in its quarterly Crop Prospects and Food Situation report that while prospects for global cereal production in 2011 have improved since September, at a projected 2.31 million metric tons (MMT), world cereal production would be up just 3% from 2010.
FAO projects world cereal stocks to be up 1.4% in 2011-12 to 494.4 MMT, which is still below 526.2 MMT two seasons ago. The group projects global wheat production at 30 MMT, up 4.6% from 2010-11; and rice production at 24 MMT, up 3%; and coarse grain production at 24 MMT, up 2.1%.
Despite the expected production gains, the report warns that because of the slowdown in the global economic recovery and increased risks of recession, there is uncertainty as regards the impact on world food security. Worsening economic conditions could result in higher unemployment and lower incomes for the vulnerable and needy in the developing countries.
According to the report, the anticipated recovery in global cereal production combined with lower than earlier anticipated demand, including for ethanol, are contributing to a decline in prices. It states in September, international prices of all cereals with the exception of rice fell sharply, driven by large export supplies from the Black Sea region and prospects for a weakening of demand.
FAO's monthly Food Price Index, also published today, fell 2% in September compared to August, to 225 points, mostly on lower international prices of grains, sugar and oils. The Index is now 13 points below the peak of 238 reached in February 2011, but still higher than its September 2010 value of 195 points.