FAO doesn't forecast grain deficit in Russia

The UN Food and Agriculture Organization (FAO) does not forecast a reduction in wheat production, despite the droughts that have hit Russia, but considers the world stockpiles of grain sufficient, RIA Novosti reports, citing an FAO spokesman.

The FAO said that world wheat production this year dropped from 676 million tons to 651 million tons. The droughts have affected grain production in Russia, Kazakhstan, Ukraine and Canada. There are fears about a deficit of world grain supplies in 2010-2011.

There may be problems with winter seeding in 2011-2012. But the grain market is still more stable than it was in 2007-2008.

World prices for wheat increased by 50% in June 2010 due to fears on the market. But harvests from the previous two years are enough to compensate for any possible deficit this year.