By Svetlana Kovalyova
Global wheat output for 2010 is set to fall 5 percent to 648 million tonnes, mostly due to a 32-percent output drop in Russia to 42 million tonnes after a record summer drought, the Food and Agriculture Organisation (FAO) said on Wednesday.
It also slashed its 2010 world cereals output view to 2.216 billion tonnes from a previous forecast of 2.239 billion tonnes.
"With the pressure on world prices of most commodities not abating, the international community must remain vigilant against further supply shocks in 2011 and be prepared," the FAO said.
But ample supplies of rice, wheat and white maize, the most important staple food crops in many vulnerable countries, will lessen the risk of a repeat in the current season of the 2007/08 food crisis, which saw riots and panic buying, it said.
The body, which forecast rising grain output in its previous Food Outlook which was published in June, before Russia's drought, trimmed its view in September.
Highlighting concern over prices, surging values in many agricultural commodities including corn and sugar have led China, a major consumer of commodities, to say it aims to stabilise grain, oil, sugar and cotton markets.
"Harder times (are) ahead unless production of major food crops increases significantly in 2011," the FAO said.
EYES ON NEW CROP
With increased draw downs on grain stocks due to production shortfalls in 2010, new crop plantings are critical for setting the tone for supply stability in international markets, it said.
"With high commodity prices, we hope and we expect that there will be enough production next year to meet demand and replenish stocks," FAO's Assistant Director General Hafez Ghanem told a news conference.
Wheat output in the 2011/12 season should rise by at least 3.5 percent to prevent stocks from plunging to critically low levels, the agency said, but stopped short of making its own forecast for next season wheat crops.
Rising world prices have encouraged farmers to sow more wheat for the 2011/12 season, with winter wheat plantings in the European Union expected to rise by about 3 percent compared with the previous season, the Rome-based agency said.
The U.S. winter plantings, virtually completed by the end of October, increased by 2-3 million hectares, but crop conditions there were "far from ideal" in November, especially in Kansas, a major producing state.
The International Grains Council (IGC) forecast wheat plantings would rise by about 3 percent in 2011/12. In the Black Sea region, hit by bad weather this summer, an expected rise in spring plantings in Russia should offset a fall in the winter plantings area, but overall yield potential is seen lower than normal, while the winter wheat area in Ukraine should be close to last year's average, the FAO said.
Russia's winter grain sowing area could fall by about 10 percent this year, much less than originally feared, the director of Russia's weather forecasting service was quoted as saying last week.
FOOD CRISIS GHOST
This year, the global cost of imported foodstuffs is set to pass the $1 trillion mark, driven by sharply higher prices in most commodities than in 2009, with poor countries hit hardest, the agency said.
"Poor countries have to import food at much higher prices. Whether or not this will lead to domestic problems, turmoils, demonstrations, riots, the kind of things we saw in 2008, or not, it is not possible to predict," FAO's senior grains economist Abdolreza Abbassian said.
"It depends very much on how these countries will cope with these high prices and whether or not these high prices will get transmitted to the domestic markets," Abbassian said.
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