Date:12/04/2005 URL: http://www.thehindubusinessline.com/2005/04/12/stories/2005041201121000.htm

Back Cereals supply seen tight next year

G. Chandrashekhar

Mumbai , April 11

DESPITE favourable production conditions for major cereal crops, global supplies could be tight in 2005-06 and result in a draw-down of world carryover reserves, the Food and Agriculture Organisation (FAO) has said in its latest Food Outlook.

World cereal crop forecast at 1971 million tonnes (mt), including rice in milled terms for 2005, is above the average of last five years, but slightly lower than last year's record crop of 2,057 mt, which was driven mainly by higher coarse cereal (mainly maize) production, as also wheat.

On current reckoning, world cereal utilisation is forecast at 1,955 mt, which would be close to trend. But if consumption expands above trend, it could lead to further supply tightness, additional draw-down of stocks and firm prices, the report pointed out.

World wheat output is set to decline to 615 mt (627 mt), while coarse cereals are projected at 945 mt (1,026 mt). Import trade in wheat is expected to reach 103 mt for the season ending June 2005.

Among non-cereal basic foods that show some recovery, the meat market is likely to open up and exportable supplies set to increase. However, the meat market this year could still be influenced heavily by food safety concerns in the wake of Asian human fatalities due to avian influenza and BSE (Mad Cow disease), the report warned.