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MUMBAI, April 8

WORLD cereal production in 2003 is forecast to rise to 1,895 million tonnes, 62 mt more than the poor 2002 harvest and above the average of past five years. The forecast utilisation in 2002-03 stands marginally below the level of the previous year, the Food and Agriculture Organisation highlighted in its latest Food Oulook.

The output of both wheat and coarse grains is forecast to increase by about 4 per cent to 591.5 mt and 908 mt respectively.

The rice crop (milled basis) is anticipated to recover by two per cent to about 395 mt.

The contraction in cereals utilisation mostly reflects expectations of a reduced use as feed, FAO said.

It added that if confirmed, this would be the first year that overall cereal consumption would depart from the rising trend prevailing since 1995.

Despite the lack of growth in utilisation, the drawdown in global cereal reserves necessary to bridge the gap between production and consumption in 2002-03 is expected to be huge, at almost 108 mt, the report pointed out.

International prices of most cereals remain under downward pressure. Generally favourable prospects for 2003 crops have contributed to a further eakening of markets which were already under pressure from large export availabilities in several non-traditional exporting countries, FAO noted.

In response to crisis in Iraq, the United Nations has appealed for $2.2 billion to assist the Iraqi people over a six-month period until the end of September. Of the total, $1.3 billion would be required to cover food needs.

International prices for dairy products continued their recovery during the first three months of 2003. Prices are expected to show further moderate increase, at least until mid-year, the report forecast.

International meat prices are expected to rise in 2003 in response to tightening meat supplies.

However, developments in the market will depend greatly on the impact of trade restricting measures likely to be introduced by major importing countries.

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