Tighter grain supplies, high prices forecast for 2006-07

New Delhi, Nov 26 (UNI) The International Grain Council (IGC) has forecast a wheat production of 587 million metric tonne (MMT) in 2006-07, lower by almost 31 MMT over 2005-06.

The corn production is forecast at 688 MMT, down by almost 5 MMT over 2005-06. The consumption of corn as per IGC is expected to be 721 MMT, higher than 2005-06 estimates of 700 MMT.

This is the second year in a row that the world grain production will be lower, while consumption will be up, signalling tighter supplies and higher prices for 2006-07.

The Chinese government has finally confirmed that they have issued export permits for 4 MMT of corn from Nov 2006 to Feb 2007, but there have been reports that the 1 MMT corn export slated for November-December 2006 is delayed.

Speculation on exports from China, have also increased the local prices in China. In Argentina, the permits for new crop export registrations are on hold, as the government audits the registrations and wishes to introduce a higher export tax, says IGC.

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