The Hindu Business Line : World wheat prices to ease next season

In particular, wheat export prices that currently are ruling strong may see a downward movement with the anticipated easing of supply tightness, but rice and coarse grain prices are unlikely to soften any time soon.Making these observations in the latest Food Outlook, the Food and Agriculture Organisation (FAO) forecast that in 2004 world cereal production was set to increase to 2,130 million tonnes, some 2 per cent above last year and 3 per cent above the average of last five years.Wheat, and to an extent rice, will contribute to higher supplies. "Because early prospects for wheat are favourable, some easing of wheat prices could be anticipated as the harvest approaches in the coming months in the northern hemisphere", the report noted adding that the early forecasts, especially for rice and coarse grains, were tentative and based on theassumption of normal weather.World cereal consumption in 2003-04, the FAO report forecast, would be 1,971 mt, one per cent more than in the previous year, but still slightly below the 10-year trend. This is in spite of strong cereal prices and outbreak of animal disease in the latter half of the season, the report pointed out, attributing increased utilization to strong demand for feed and industrialuse, especially in the US.FAO cautioned that closing inventories for the current year were expected to be down by 89 mt or 18 per cent from their opening levels.