May 17, 2007

FAO foresees record for 2007 world coarse grain output

The UN Food and Agriculture Organisation (FAO) projects a record high production of 1,051 million tonnes of world coarse grains this year, driven by demand for corn from the biofuels industry. 

Revising its previous forecasts, FAO said in a statement on Wednesday (May 16) that the bulk of a higher than expected 7.1 percent output increase would come from corn which accounts for about 70 percent of the total coarse grain output.

As climate change pushes for more environmental-friendly resources, requirements for corn-derived bioethanol should boost total industrial use of coarse grains by 9 percent in 2007/08, it said.

On the other hand, the agency has reduced its forecast for world wheat output to 621 million tonnes due to harsh winter conditions in the United States in April which damaged crops on a large area of the main winter wheat areas.

World cereals output is on the path to hit a record of 2,095 million tonnes this year, up 4.8 percent from 2006 and above an earlier estimate of 2,082 million, FAO said.

However, the surge in demand from the food, feed and fast-growing biofuels sectors meant the demand and supply balance would remain constricted as carry-in stocks forecast at their lowest level since the early 80s, even with the improvement in production expected, total supplies in the new season is still inadequate to meet the anticipated demand, the agency noted.

Global rice production was expected to edge up 0.6 percent to 422 million tonnes in milled terms, matching the 2005 record.

The FAO also reported that despite improved supply and record bumper cereal crops in 2006, food problems persisted in 33 countries worldwide. The FAO recommended emergency assistance for large numbers of vulnerable farmers in Bolivia where drought and floods during the 2007 main cropping season has resulted to massive crop and livestock losses.