UN: World grain crop to fall 2.7 percent

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PARIS — World grain production will fall 2.7 percent this year on smaller harvests of wheat and corn, while dairy output will rise, the United Nations’ Food and Agriculture Organization said today. It predicted a lower global food-import bill.

The world’s farmers will harvest 2.28 billion metric tons of cereals, down from 2.35 billion tons last year, the Rome-based agency wrote in an emailed report. Grain use will outpace output, cutting stocks to the lowest in five years.

Wheat futures have climbed 37 percent in Chicago in the past 12 months as drought damaged harvests in Russia, Ukraine and Australia. Corn advanced 13 percent as the worst U.S. drought in half a century cut yields.

“World cereal supply and demand balance is proving much tighter than in 2011-12,” the FAO wrote. “Tightening is not uniform across all cereals. While this season’s maize and wheat supplies are compromised by disappointing harvests, supplies of rice are ample,” the agency said, using another name for corn.

World grain consumption may slip 0.6 percent to 2.31 billion tons, while ending stocks of grain may slump 4.8 percent to 497.4 million tons in the 2012-13 season from 522.6 million tons a year earlier, according to the forecast.

The global food-import bill is seen falling 9.7 percent this year to $1.14 trillion from a record $1.26 trillion in 2011 on lower costs for freight and reduced spending on vegetables and fruits, grains and sugar, according to the FAO.

“Many countries should experience an increase in food availabilities in 2012,” the FAO wrote. “However, with much lower international prices for key export commodities, such as sugar and tropical beverages, the terms of trade in food and agriculture for commodity-dependent developing countries may also deteriorate.”

Developing countries’ food-import bill may drop to $426.7 billion in 2012 from $472.7 billion last year, while for developed countries the import bill may decline to $709.1 billion from $784.8 billion, according to the FAO.

The cost of importing vegetables and fruit is predicted to decline to $190.4 billion in 2012 from $217.4 billion, while imports of cereals are forecast to shrink to $156.6 billion from $180.5 billion.

Global production of wheat may slide 5.5 percent to 661.2 million tons in 2012, the FAO said. The outlook is “considerably” below forecasts earlier in the year, it said.

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