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Production is 3 per cent (68 million tonnes) higher than in 2010/11 and 3 million tonnes more than FAO forecast last month; the rise is because of improved expectations for wheat and rice crops. The year-on-year increase  includes a 4.6 percent (30 million tonnes) rise in global wheat production, a 3 percent (14 million tonnes) increase in rice and a 2.1 percent (24 million tonnes) hike for coarse grains. 

While consumption will also increase somewhat, the FAO said worsening economic conditions could result in higher unemployment and lower incomes for the vulnerable and needy in the developing countries, with prices remaining relatively tight, this could affect peoples’ access to adequate food.

Prices decline, though volatile weather and prices increase uncertainty

The FAO do anticipate a decline in prices, resulting from the recovery in global cereal production combined and lower than anticipated demand, citing that last month international prices of all cereals except for rice fell sharply. The FAO’s Food price index, which measures the price of key staples, fell 2 per cent in September on lower grains, sugar and oil prices. Prices remain higher than in September 2010.

However, Abdolreza Abbassian, senior economist and grain analyst at the FAO said the picture was not so simple, "It is likely that the prices will remain under a downward pressure for some time, I think volatility will remain with us, unfortunately ... We are in for a very bumpy period ahead."

The report also reveals that irregular rains in West Africa during the cropping season, as well as continued drought in East Africa will lead to a significant drop in production and increased food insecurity in these regions. The latest figures show 32 countries around the world are in need of external assistance as a result of crop failures, conflict or insecurity, natural disasters, and high domestic food prices.