World grain output likely to rise

World grain output will likely rise in the next decade as producers are encouraged by soaring prices around the globe and developing countries try to answer increasing food needs, a major study said on Wednesday.
The study, co-written by the Organisation for Economic Cooperation and Development (OECD) and the United Nations' Food and Agriculture Organisation (FAO), said that assuming a return to normal yields, grain output was likely to rise from 2007.
Supported by a boom in the biofuel sector and the incentive of currently higher prices, global grain output was projected to recover from the recent deficits which made countries draw down their stocks, now projected at their lowest levels in 30 years.
"Driven by current low stocks and high prices there will be a shift towards more area planted in cereals," the study said, with the grain output forecast put at 1.2 billion tonnes of coarse grains by 2016, including 673 million tonnes of wheat.
"Nevertheless beyond the initial years of the outlook, much of the growth in output is expected to stem from area productivity gains as world prices decline from current highs."
REBOUND IN GLOBAL TRADE The bulk of wheat and coarse grains production would continue to be concentrated with the largest producers - the United States, the EU and China, along with India for wheat - dominating over half of the total world output, it said.
The rise would also lead to a rebound in global grains trade after exports were substantially cut in recent years in several large producing countries due to weather jitters. In its 2007-2016 agriculture outlook the OECD-FAO pegged the global cereal trade to grow at close to 1.5 percent annually.
The European Union was seen to be among the winners and surpassing Canada and Australia to become the second largest wheat exporter after the United States. "However, the recuperation of traditional export sources will be supplemented by export expansion in Russia, Ukraine and Argentina and in Brazil for coarse grains, while Chinese exports of both cereals are expected to diminish," the study said. Import demand for wheat was seen growing in India, Brazil and Egypt as well as other developing countries, notably due to rising per capita incomes and expanding food markets.