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Grain Output Will Rise, But So Will Prices: UN
June 07, 2011

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Milan. World cereals output is expected to rise to a new record in 2011 due to more planting and improved yields but low stocks are set to keep prices high and volatile, the United Nations’ food agency said.

Global cereals output is expected to rise 3.5 percent to 2.32 billion tons this year, recovering after a 1 percent fall in 2010, the UN’s Food and Agriculture Organization said on Tuesday.

World wheat output is seen rising 3.2 percent to 674 million tons this year, down from an earlier forecast of 676 million tons due to unfavorable weather in North America and parts of Europe, the FAO said in its report.

Wheat outlook in the main producing countries is patchy with the European Union’s output seen flat at 137 million tons, US crops falling 8.5 percent to 55 million tons due to bad weather while Russia’s output is expected to jump 32.5 percent to 55 million tons, recovering after 2010’s severe drought.

Upcoming weather remains critical for shaping final crop outcomes, the FAO said.

World coarse grains output is expected to rise 3.9 percent to a new high of 1.16 billion tons, driven by corn crops with the bulk of the increase seen in the United States, where a record crop of 343 million tons is still expected despite delays in planting due to adverse weather, it said.

Increasing global grain production this year would not be enough to rebuild strong stocks which could stabilize prices, the FAO said, adding that demand growth is expected to slow down this year, especially from the biofuels sector.

World cereals stocks at the end of 2011/12 season are expected to edge up 0.8 percent to 494 million tons.

Reuters