May 4, 2012

UN food body lowers 2012-13 wheat forecast to 675 million tonnes

For world wheat production in 2012-13, the United Nations food body Thursday (May 3) sharply cut its forecast to 675 million tonnes from an earlier 690 million tonnes, citing large declines in output from Ukraine, Kazakhstan, China, Morocco and the EU.

However, the Food and Agriculture Organisation said global wheat supplies are still expected to be adequate for the upcoming marketing year due to an anticipated decline in utilisation, with international prices likely to remain under downward pressure.

The Rome-based body said the anticipated 3.6% contraction on the previous year's production coincides with an expected recovery in supplies of coarse grains, meaning the usage of wheat for annual feeding is likely to fall to more normal levels after exceptional growth in 2011-12.

The FAO said that world wheat trade in 2012-13 is forecast to contract by around 1.8%, after surging around 8.7% in 2011-12, reflecting a weakening of import demand, especially for feed wheat.

Large export supplies are also likely to weigh on world markets indicating that international prices are likely to average lower than in 2011-12, barring any major unexpected supply shocks in coming months.