Foodgrain harvest to dip 3.4%: FAO

World foodgrain production is VV likely to drop this year by 3.4 per cent but it would still be the second highest harvest on record, next only to the last year's record output. The lower production would, therefore, neither perceptibly impact the global grain stocks nor stem the downturn in the international prices of most cereals, barring rice. This has been revealed in the latest report on the global food outlook released by the UN Food and Agriculture Organisation (FAO). It has indicated that the export supplies are likely to remain at last year's level due to large carryover stocks and an anticipated fall in demand, especially for wheat and coarse cereals, because of lower use of grains as animal feed. The report points out that the international prices of most foodgrain have weakened considerably in the past few weeks, being pushed down by seasonal harvest pressure and reasonably good production prospects. Besides, factors like favourable production outlook in several countries, including India, Chine, north Africa and the CIS countries, and good rainfall in Australia have also continued to softening of global grain prices. The export price of uS wheat (No 2 hard red winter wheat) was $228 a tonne last week. This is about 33 per cent lower compare to last year and about 50 per cent below the peak touched in 2008. However, the international prices of rice have shown more resilience thanks to rather unnfavourable monsoon rains in India in the early phase of the season. The FAa report projects the total cereal output in 2009 at 2,208 million tonnes, down 3.4 per cent from 2,285 million tonnes in 2008. The reduction is mainly in the output of wheat (down 4 per cent) and coarse grains (down 4.3 per cent). The production of rice is forecast to increase, though the rice prices are also projected to remain film because of higher demand and lower export supplies. The wheat output in 2009 is projected at 655 million tonnes, down 4 per cent from 683 million tonnes bagged in 2008. The bulk of decrease is accounted for by lower harvests in parts of Europe and the USA where the farmers reduced area under the crop in view of anticipated fall in returns due to lower international prices. The coarse cereals output is put at 1,093 million tonnes, against the record 1,142 million tonnes last year, marking a drop of 4.3 per cent. Africa is the only region where output is foreseen to increase, and most of that reflects a recovery in North Africa after drought last year," the report states.