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Our Bureau

Mumbai, Nov. 6 Global cereal output is forecast to surge a massive 5.3 per cent to a new high of 2,241.5 million tonnes in 2008-09 even as high prices boosted plantings and weather was generally favourable.

Global stocks of wheat, coarse cereals and rice may actually expand this year, reversing the recent declining trend.

However, the ongoing global financial market uncertainty can affect the agricultural sector, especially of developing countries, the UN Food and Agriculture Organisation (FAO) warned in its latest Food Outlook, adding record crops and recent sharp fall in food prices should not create a false sense of security.

Much of the increase in farm output has come from developed countries where growers have responded to prices.

The recent price declines may discourage growers from planting more because they are burdened with high input costs and lower returns than earlier anticipated, which could potentially affect farm output in 2009-10, the agency argues.

Specifically, world wheat production has shown a record increase of nearly 11 per cent to an unprecedented 677 mt. Total consumption is projected to expand 4.5 per cent to a new high of 643.3 mt. Demand is expected to be underpinned by strong growth in feed wheat utilisation. World wheat trade is projected at a new high of 119 mt. (111.2 mt) encouraged by abundant supplies and lower export prices.

In case of coarse grains, production (1,114.2 mt) and total utilisation (1,109.2 mt) both are projected to increase by 3.3 per cent in 2008-09; but trade may actually decline because a part of feed demand may be met by feed wheat supplies.

Rice output is likely to show a modest growth of 2.4 per cent to 450.2 mt, while total utilisation may grow even slower at 1.8 per cent to 444.4 mt allowing stocks to expand by 5.5 per cent to 115.4 mt. Although rice prices too have dropped recently, they are still high enough to discourage trade expansion given the financial crunch. The trade volume could decline marginally to 30.5 mt.

The FAO report has also highlighted long-term challenges facing global agriculture such as land and water constraints, low investment in rural infrastructure and agricultural research, expensive agricultural inputs in relation to farmgate prices and little preparedness to face climate change challenges.

More Stories on : Foodgrains

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