FAO: Near-record wheat output forecast

Global wheat output this year is forecast at 690 million tons, the second-highest on record, the United Nations Food and Agriculture Organization said in Rome. The FAO reported in its quarterly crop prospectus and food situation that food prices rose 1 percent in February, the second straight month of increase. The report said this year's wheat production, while about 10 million tons less than last year's record harvest, would still be above average of the past five years. The report said plantings have increased or were forecast to increase in many countries this year in response to continuing strong prices. The agency said it was too early to make a production forecast on cereals for this year but said it had noticed a firming of international prices in recent weeks due to tightening current wheat supplies and concerns over the impact of severe cold weather in Europe. The report said adverse weather in West Africa has caused a sharp drop in cereal and pasture production in large parts of the region. This, combined with high food prices and civil strife, is leading to high food insecurity and increased malnutrition in Niger, Chad, Mauritania, Mali and Burkina Faso. In Far East Asia, prospects for the 2012 wheat crop are generally favorable, with output expected to reach last year's record level due largely due to gains in India. The higher food prices in FAO's February Food Price Index were mostly driven by higher prices of sugar, oils and cereals, offset somewhat by dairy prices, which eased slightly after a jump in January.