The Hindu Business Line : FAO sees fall in global cereal stocks

WITH tightening global inventory, cereal prices around the world are poised to rise and the world cereal market could face volatile conditions in 2004-05 because availability may not match the expected consumption even though production prospects are rated good.

World cereal stocks are forecast to fall in the new 2004-05 marketing season, a fifth consecutive annual decline, despite an expected increase in cereal production for 2004 at 1,956 million tonnes, the UN Food and Agriculture Organisation (FAO) said in its latest Food Outlook.

The agency has forecast a 3.4 per cent decline in world cereal trade in 2004-05 to 229.7 mt, with the decline reflecting good crop prospects in traditional importing countries as well as strong production recovery in Europe.

International meat prices are expected to surge as outbreaks of animal diseases in major meat exporting countries and resulting bans on imports from affected areas are seen reducing exportable surpluses.

In case of milk, the report forecast that prices will be at or near the current high levels for the remainder of this year. Price in the first half of 2004 was well above average following sustained import demand and limited export availability.

World pulses production will hit a record 60 mt in 2004, which Food Outlook said could lead to increased consumption and trade during the year.