March 9, 2012

 

World wheat output in 2012 second highest on record

 

 

Global wheat output is expected to hit 690 million tonnes in 2012, down 10 million tonnes from last year's all time high but still the second highest on record, the UN Food and Agriculture Organization said Thursday (Mar 8).

 

Planting remained strong and is projected to increase in many countries in response to sustained high prices, FAO said in its quarterly Crop Prospects and Food Situation report.

 

In the EU, the world's largest wheat producer, a marginal increase in the planted area is likely to be countered by a return to normal yields in 2012, leaving output virtually unchanged from 2011 at 138 million tonnes, FAO said.

 

The US is projected to achieve the highest year-on-year growth, with output rising 10% to 60 million tonnes, boosted by larger planted areas of winter and spring wheat, the report said.

 

The UN agency revised up the 2011 wheat harvest by 6.7% to a record 700 million tonnes, as output in key producing countries in the southern hemisphere turned out to be larger than predicted.

 

A record cereal crop harvested in 2011 helped replenish world inventories, putting downward pressure on prices during the second half of 2011, the FAO said.

 

But a weaker dollar and plunging freight rates have prompted import demand at the start of 2012, the report said.

 

"This, combined with unfavourable weather conditions in major exporting countries - including excessive cold across much of Europe and the CIS [Commonwealth of Independent States], unseasonably dry conditions in the southwest United States and inadequate precipitation in South America - have supported world prices in recent weeks," the report said.

 

The FAO food price index, which measures price developments across a basket of agricultural commodities, rose to 215 points in February, up 1% on the previous month.

 

The UN agency attributed the increase to high prices of sugar, oils and cereals, while dairy products fell after rising sharply in January.

 

The food price index is currently 10% below its record value reached in February last year.

 

World wheat production will likely fall by 10 million tonnes, or 1.4%, to 690 million tons in 2012, the United Nation's food body said Thursday (Mar 8), which would still be the second highest harvest on record.

The Food and Agriculture Organization said although plantings have increased, or are forecast to increase, in many countries in response to strong prices, a return to normal yields is expected in areas where record highs were achieved last year.