MUMBAI (Commodity Online): Global wheat prices are expected to remain higher due to lower output forecast by International Grain Council (IGC) and the UN's Food and Agriculture Organization (FAO).
IGC has revised the global wheat forecast lower by 1.9% for the 2010-11 to 651 million metric tons due to the output losses in parts of Black Sea regions, such as EU and Canada.
While, Abdolreza Abbassian, secretary of the Intergovernmental Group for Grains under FAO said, both production and stocks may be 10 million-15 million tons lower if not more, than estimates in June.
U.S. wheat prices have surged nearly 49% from a nine-month low in June following a drought in Russia, flooding in Ukraine and Canada and a smaller-than-expected crop in the European Union.
However, the report IGC pointed out that the significant change in the crop output is likely to be overcome by the increased exports from the US.
The IGC data showed that the current prediction is 13 million tons lower than its June estimate of 664 million tons and down by 26 million tons compared with the 2009-10 season estimates, when world wheat production was 677 million tons.
The outlook for the Northern Hemisphere crop is still unclear, with a clearer picture likely to emerge only by September when FAO is scheduled to release its next estimate, he said.
Countries such as Russia, which has been hit by the drought, are also the ones having high inventories, which may help cushion the impact of the latest rally in prices.
Similarly in India, total wheat stocks stood at 33.58 million tons at the start of July, against a buffer and strategic reserve requirement of only 20.1 million tons.