June 13 (Bloomberg) -- World cereal production will rise 3.2 percent to a record this year, exceeding consumption and resulting in growing stockpiles that will weigh on prices, the United Nations’ Food & Agriculture Organization forecast.
Farmers across the world will harvest 2.42 billion metric tons of grain in 2012, climbing from 2.34 billion tons in 2011, the Rome-based UN agency wrote in a crop prospects report. The outlook was raised from 2.37 billion tons in May.
The FAO forecasts record harvests of corn and rice on increased planting, lifting grain stocks to the highest since 2002. Corn futures in Chicago have dropped 21 percent this year amid expectations U.S. farmers will harvest their biggest-ever crop of the grain.
“The bulk of the increase is expected to originate from just one crop in one country, maize in the U.S.,” the FAO wrote, using another name for corn. “Global cereal production would exceed the anticipated utilization in 2012-13 and lead to a significant replenishment of world stocks, which would keep international prices under downward pressure.”
Grain purchases by 66 low-income, food-deficient countries are forecast to decline in 2012-13 on bigger domestic harvests, the FAO said. The import requirements for them will fall to 84.4 million tons from a record 85.8 million tons in 2011-12, the organization said.
“This is based on expectations of declines in cereal imports, particularly in large importing countries such as Egypt, Indonesia and Nigeria,” the FAO wrote.
World grain stocks are forecast to climb to 547.6 million tons from 511.8 million tons at the end of the 2011-12 crop year, the agency said.
Cereal use is forecast to climb about 2 percent to 2.38 billion tons, with feed utilization rising 3.8 percent and food consumption advancing about 1 percent, the UN agency said. Corn use for feed is forecast to jump 7.5 percent to a record 521 million tons, the report said.
“The main feature in 2012-13 is likely to be a return to more normal feed wheat utilization, after a sudden surge in 2011-12 in response to reduced maize supplies,” the FAO said.
Production of coarse grains, which include corn, barley and sorghum, will jump 7.3 percent to 1.25 billion tons from 1.16 billion tons, based on the FAO outlook. Rice production is predicted to advance 2.2 percent to 490 million tons.
Wheat output will drop about 3 percent to 680 million tons, the FAO said.
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