The Food Outlook of the Food and Agriculture Organization (FAO) that came out in June, 2010 has predicted that world cereal production would be reaching a record level of 2279.5 million tonnes in 2010-2011, which would be an increase of 1.2 percent over last year’s global production of 2253.1 million tonnes. As a result, it has been predicted that there would be a modest increase in world trade in cereal and overall, a fairly comfortable cereal supply and demand outlook is foreseen. International prices of all cereals have declined in recent weeks on good prospects for the new season and developments in other markets, including the strengthening of the United States Dollar and weakening crude oil prices.

The Planning Commission of India has recently projected that agriculture and allied sectors in India would experience a robust growth rate of five per cent in 2010-2011 from 0.2 per cent during last year.

World production of wheat is expected to fall to 676.5 million tonnes in 2010-2011 from 682.4 million tonnes. But international wheat prices may fall. Coarse grain production at the global level is expected to rise from 1115.2 million tonnes in 2009-10 to 1130.9 million tonnes in 2010-2011. There is expectation of yet another record maize crop in the United States, the world’s largest producer and exporter of maize. The Food Outlook report also informs that wheat plantings are complete and major harvests will soon begin. For rice and coarse grains, plantings are not over and in some cases, have not even begun.

The Food Outlook forecasts that global rice production in 2010 would face vigorous growth, as prices remain relatively attractive and governments continue to provide much support to the sector.

International prices of cereal has fallen down in the recent times as could be seen from the decline of FAO Cereal Price Index to 156 points in May 2010, down nearly 9 percent, or 15 points, from December 2009 and as much as 43 percent below its April 2008 peak of 274 points. International oilseed prices may decline in coming months as supply increases. This may have some implications for India, which has seen rise in prices of essential commodities in the recent times. Even the Prime Minister of India in his interaction with the Indian media has talked about decline in inflation to 5-6 percent by the end of this year owing to better monsoon.

References:

Food Outlook by FAO, June, 2010
http://www.fao.org/docrep/012/ak349e/ak349e00.pdf

Economic Survey 2009-10,
http://indiabudget.nic.in/es2009-10/chapt2010/chapter08.pdf,

India Meteorological Department Press Release,
http://www.imd.gov.in/section/nhac/dynamic/pressrelease.pdf

Shadow of Drought on Delayed Monsoon,
http://www.im4change.org/articles.php?articleId=144

FAO sees bigger 2010 grain crops, price pressure by Svetlana Kovalyova, 
Live Mint, 3 June, 2010, http://www.livemint.com/2010/06/03152539/FAO-sees-bigger-2010-grain-cro.html   

Global food output to rise to record high: FAO, The Business Standard, 4 June, 2010,

http://www.business-standard.com/india/news/global-food-output-to-rise-to-record-high-fao/396956/  

Farm sector records lowest growth in 5 yrs at 0.2%, The Economic Times, 31 May, 2010,

http://economictimes.indiatimes.com/news/economy/indicators/Farm-sector-records-lowest-growth-in-5-yrs-at-02/articleshow/5994614.cms  

Record wheat output likely, Centre upbeat by Gargi Parsai, The Hindu, 14 May, 2010,

http://beta.thehindu.com/news/national/article429177.ece 

‘With good monsoon, farm growth rate will be robust' by Gargi Parsai, The Hindu, 27 May, 2010, http://www.hindu.com/2010/05/27/stories/2010052759880700.htm  
 
International prices of agricultural commodities drop,
http://www.fao.org/news/story/en/item/42790/icode/

2009-10 turns out not all that bad for farm sector by Harish Damodaran, The Business Line, 1 June, 2010,
http://www.thehindubusinessline.com/2010/06/01/stories/2010060152530400.htm 

PM’s Promise: Inflation to be down by 5-6%,
http://www.mybangalore.com/article/0510/pms-promise-inflation-to-be-down-by-5-6.html

Release of World Development Report 2010: Development and Climate Change,

http://www.im4change.org/articles.php?articleId=136

Skyrocketing prices may be bad news but the worst is yet to come!,
http://www.im4change.org/articles.php?articleId=164