MUMBAI (Commodity Online):
Global wheat prices are expected to remain higher due to lower
output forecast by International Grain Council (
) and the UN's Food and Agriculture Organization (
IGC has revised the global wheat forecast lower by 1.9% for the
2010-11 to 651 million metric tons due to the output losses in
parts of Black Sea regions, such as EU and Canada.
While, Abdolreza Abbassian, secretary of the Intergovernmental
Group for Grains under FAO said, both production and stocks may be
10 million-15 million tons lower if not more, than estimates in
U.S. wheat prices have surged nearly 49% from a nine-month low
in June following a drought in Russia, flooding in Ukraine and
Canada and a smaller-than-expected crop in the European Union.
However, the report IGC pointed out that the significant change
in the crop output is likely to be overcome by the increased
exports from the US.
The IGC data showed that the current prediction is 13 million
tons lower than its June estimate of 664 million tons and down by
26 million tons compared with the 2009-10 season estimates, when
world wheat production was 677 million tons.
The outlook for the Northern Hemisphere crop is still unclear,
with a clearer picture likely to emerge only by September when FAO
is scheduled to release its next estimate, he said.
Countries such as Russia, which has been hit by the drought, are
also the ones having high inventories, which may help cushion the
impact of the latest rally in prices.
Similarly in India, total wheat stocks stood at 33.58 million
tons at the start of July, against a buffer and strategic reserve
requirement of only 20.1 million tons.