American Shipper

FAO: World cereal trade to decline slightly in 2005-2006

FAO: World cereal trade to decline slightly in 2005-2006

   The United Nations Food and Agriculture Organization (FAO) forecasts that world cereal trade is set to decline slightly in the 2005-2006 marketing season, with major producing and exporting developed countries seeing most of the downturn.

   In the June issue of 'Food Outlook,' the FAO puts global cereal trade in 2005-2006 at 230 million tons, or 1.3 percent below the previous season, mainly due to lower wheat import demand.

   The FAO said prospects for the 2005 global cereal crop remain favorable, and forecasts world output in 2005 at 2.0 billion tons, 2.8 percent below the record 2004 crop. Pulse production is also expected to decline slightly in 2005 to 61 million tons.

   “The bulk of the decrease is expected in coarse grains production in the United States and Europe,” according to the report, “where yields are expected to return closer to average after record levels last year,” the FAO said.

   For developing countries, the FAO forecasts a “marginal increase in the 2005 aggregate cereal output, mostly on account of better prospects in parts of Asia. Output in Africa may fall for the second consecutive year reflecting drought in the north of the region, which more than offset a slight increase expected in sub-Saharan Africa. In the group of Low-Income Food-Deficit Countries, the 2005 cereal production is also forecast only marginally up from 2004.”

   The FAO also reported that coffee prices surged in the first quarter of 2005, and by late May were almost 60 percent higher than a year ago. “The early outlook for 2005-2006 points to a further reduction in output, which could support a continuing upward price trend for the rest of the year, further increasing revenues in exporting countries,” the FAO said.