FAO raises 2009 cereals forecast despite rice dip

By Silvia Aloisi

ROME (Reuters) - World cereal production this year is expected to be 2.234 billion tonnes, just two percent below last year's record crop and nearly 26 million tonnes higher than previously expected, the United Nations said on Tuesday.

In its latest report on food security and crop prospects, the U.N. Food and Agriculture Organisation (FAO) said the improved outlook was mostly due to larger than previously forecast wheat crops in Asia, Africa, Europe and the U.S.

The stronger prospects for wheat and coarse grains more than offset a fall in the forecast for rice output, with the outlook deteriorating considerably since July because of weather anomalies and natural disasters in several major Asian producers, FAO said.

"A combination of a good outlook for production and relatively good carryover stocks from the previous season lessen the concern regarding the overall supply situation, at least for the current season," FAO said.

Wheat production was now expected to reach 678 million tonnes, up from the FAO's previous forecast -- issued in July -- of 655.2 million tonnes.

The global forecast for coarse grains was also raised by 15 million tonnes to 1.108 billion tonnes to account for much higher harvest expectations in the United States.

FAO expects paddy rice output to reach 672 million tonnes, down 2.3 percent from from the record 688 million tonnes harvested in 2008, noting that poor monsoon rains followed by floods had particularly hurt crops in India, with earthquakes, cyclones and landslides also affecting other producers.

Overall, the forecasts confirm the expectation that this year's cereals crop will be the second largest ever, after a record 2008.