The Hindu Business Line : Sharp drop seen in global cereal output

LATEST information confirms a sharp drop in global cereal production in 2002 to 1,833 million tonnes. Combined with a marginal rise expected in total cereal utilisation in 2002-03, world cereal stocks for crop year ending 2003 are forecast to plunge sharply by 110 mt from their opening level to 466 mt, the Food and Agriculture Organisation (FAO) said in its latest issue of Food Outlook.

World cereal trade in 2002-03 is forecast at 236 mt, five mt below the previous year's record level. The decline comes exclusively from a sharp reduction in wheat trade, as trade in coarse grains is expected to rise a bit and the early prospects for rice trade in 2003 point to a volume unchanged from 2002, FAO said.

International prices for most cereals weakened over the past few weeks as non-traditional exporters continued to shift more of their domestic surpluses onto the world market, taking advantage of the sharp reduction in exportable supplies among traditional exporting countries.

Global pulses production is forecast to rise in 2002 but poor crops in key producing and exporting countries will likely keep the global supply tight. Smaller exportable surpluses are expected to result in reduced trade and higher international prices.

In case of oils/fats and oilcakes/meals, global output is expected to increase only marginally during 2002-03 season and is certain to be surpassed by demand, especially for oils/fats, Food Outlook pointed out. The resulting decline in stocks-to-use ratio is forecast to provide upward support to the oilseeds complex prices during the season.

FAO has forecast world sugar production in 2002-03 at almost 141 mt, six mt up from the previous season. Expectations of a considerable global surplus of sugar may result in weaker prices in the coming months, the report said.

International prices for dairy products began to recover in the latter part of 2002, after falling for most of the year. Prices are expected to increase during the first-half of 2003 and possibly beyond.

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