The next few months will be critical in determining how the major crops will fare this year, the report noted. Although prospects are encouraging in some countries such as the Russian Federation and Ukraine, weather conditions, featuring too little and in some cases too much rain, could hamper maize and wheat yields in Europe and North America.
Global wheat output is expected to be 3.2 percent up from last year's reduced crop, mostly reflecting improved yields in the Russian Federation.
World production of coarse grains is set to climb 3.9 percent.
World cereals stocks at the close of the crop seasons in 2012 are put at 494 million tonnes, up only two percent from sharply reduced opening levels.
Export ban removal
Demand for cereals has also been increasing so that the 2011 crop, even at record levels, is expected to barely meet consumption, providing support to prices. But "the Russian Federation's announcement that it will remove its cereals export ban from July 2011 could help relieve some of that pressure," according to FAO's grain analyst, Abdolreza Abbassian.
In the oilseeds market, supplies in 2011/12 may not be sufficient to meet growing oil and meal demand, implying further reductions in global inventories.
By contrast, the global supply and demand balance for sugar points to some improvements, supported by large anticipated production in 2010/11, which is likely to surpass consumption for the first time since 2007/08.
Record meat prices
Regarding meat, high feed prices, disease outbreaks and depleted animal inventories were forecast to limit the expansion of global meat production to 294 million tonnes in 2011 — only one percent more than 2010. The international meat price index hit a new record at 183 points in May 2011 and a combination of strong import demand and limited export availability pointed to a further firming of prices in the next few months.
Following two consecutives years of low prices, fish markets have rebounded this year. Production in 2011 is heading to a record but prices are likely to be supported by strong demand from the developing countries.