UN Agency Predicts Sharp Decline in World Cereal Stocks

World cereal stocks are expected to decline sharply in 2006, due to a slight decrease in global cereal output and significant growth in utilization, according to the latest forecast by the United Nations Food and Agriculture Organization, which predicted that food emergencies will continue in a number of countries.

Increased demand is expected to be driven by a recovery in feed use due to a rebound in poultry consumption, FAO said. In addition, the growing demand for ethanol is likely to boost industrial use of coarse grains, particularly maize, the report said.
While down about 1 percent from 2005 levels, world cereal output for 2006 would still be the third highest on record and above the five-year average, the report said.

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