FAO sees cereal stocks falling yet again

ROME, June 15 (UPI) -- The Food and Agriculture Organization said Tuesday global cereal stocks will fall for the fifth consecutive year, despite a rise in cereal production.

"Production prospects are good, but not up to expected total levels of utilization," said Henri Josserand, chief of the FAO's global information and early warning system. "The downward trend in global cereal stocks continues, narrowing the buffer available to absorb large unexpected shocks. In view of already tight stocks, the possibility of higher and more volatile prices in 2004-05 should not be ruled out," he added.

The cereal market looks stable, however, with prices for most cereal easing back in recent weeks, the Rome-based FAO said. It expects global cereal trade to fall 3.4 percent from a year ago to 229.7 million tons.