FAO forecasts strong growth in cereal production in 2013

coarse grain production is expected to hit a new high

according to FAO published in May brief Introduction of Grain Supply and Demand the latest forecast is for strong growth in global wheat, coarse grains and rice production in 2013.

If weather conditions are better than 2012, global wheat production this year is expected to reach 0.695 billion tons, 5.4 per cent higher than last year's harvest and only about 6 million tons less than the record level in 2011.

In addition, coarse grain production is expected to set a new record of 1.266 billion tons in 2013, up 9.3 percent from the record of 1.167 billion tons in 2011.

Of this total grain production, maize will account for about 0.96 billion tonnes, about 10 per cent above 2012 levels. Much of the projected increase will come from the United States, the world's largest producer, which forecast corn plantings at their highest level since 1936. Another reason for the record production is that the major CIS producing countries have recovered from the drought.

According to FAO's preliminary forecast, rice production will increase to 0.4977 billion tons in the coming 2013 crop year, more than 16 million tons higher than in 2012, with particularly significant increases in India and Indonesia.

Grain utilization

despite the expected increase in production, world cereal utilization is expected to remain unchanged in 2012/2013 due to rising food prices and sluggish demand for ethanol. Global cereal utilization is now forecast at 2.332 billion tonnes, roughly the same as in 2011/2012.

World cereal stocks are expected to be 0.505 billion tons at the end of 2013, 1%(5 million tons) higher than the previous forecast, but about 3%(16 million tons) lower than the initial level.

World cereal trade is expected to fall sharply in 2012-2013, across all major cereals. The 0.3044 billion tonne trade was almost 1 million tonnes higher than last month's forecast, but still about 4 per cent (13 million tonnes) less than the 2011/2012 level.

FAO Food Price Index rises for second consecutive month

FAO's food price index it was revised upwards for the second consecutive month in April, by 1% or two points.

As in March, last month's growth was driven almost entirely by a sharp rise in milk prices. Most other food prices fell. The food price index stood at 215.5 points in April, 1% above the April 2012 level. Currently, the index is 9% below its peak in February 2011.

FAO Dairy Price Index april averaged 259 points, up nearly 34 points (14.9 percent) compared to March, the second largest monthly change on record. The main reason is that milk production in New Zealand, the world's largest exporter of dairy products, has plummeted.

The FAO Cereal Price Index averaged 235 points in April, down 10 points (4.1 percent) from March but down nearly 11 points (4.9 percent) from April 2012.

The FAO Oil/Fats Price Index averaged 199 points in April, down 2 points (1.5 per cent) from March. Weak energy prices and ongoing concerns about the global economy continue to put pressure on vegetable oils.

FAO Meat Price Index the average in April was 179 points, which continued to maintain the level since the second half of 2012, fluctuating in a narrow range between 177 and 179 points. However, meat prices as a whole remained at historically high levels.

The FAO Sugar Price Index averaged 253 points in April, down more than nine points from March.