ISLAMABAD: The global food commodity markets are on a stable path for the year ahead, with solid production prospects and abundant stocks pointing to a broadly stable outcome for prices and supplies, the Food and Agriculture Organisation says.

In its biannual Food Outlook, FAO says lower food prices than last year means that the world’s food import bill are on course to fall to $986 billion this year — below $1 trillion for the first time since 2009 — even as traded volumes increase.

Wheat production in 2016 will outstrip utilisation for the fourth year in a row, boosting inventories of the world’s most important cereal to a 15-year high, with major surges in China and the United States.

Total wheat utilisation will actually decline marginally as more of the world’s farmers turn to maize to feed their livestock. Dwindling international trade may intensify competition among major exporters, FAO said.

Global wheat markets are set to be well supplied in 2016-17 despite a forecast decline in global production. Total wheat output in 2016 is put at around 724 million tonnes, down 1.4pc, or 10 million tonnes, from the 2015 record.

The FAO report says total wheat utilisation in 2016-17 is likely to decrease marginally from the 2015-16 estimated level and reach 718.3 million tonnes. While food consumption is expected to grow modestly and keep pace with population growth, demand for feed and industrial uses are expected to shrink in 2016-17.

Based on the latest production prospects for 2016 and the projected utilisation in 2016-17, world wheat stocks by the close of crop seasons in 2017 are seen to increase for the fourth consecutive season, reaching 215.5 million tonnes, about 2.4pc (5 million tonnes) higher than their already above-average opening level. World wheat trade in 2016-17 is set to increase slightly, to 155 million tonnes, as higher imports by a few countries.

Published in Dawn, June 12th, 2016