GLOBAL CEREAL stocks are expected to fall during the 2004/2005 marketing year, which is a fifth consecutive annual decline.

Despite an expected increase in cereal production for 2004 to 1,956m tonnes, the UN Food and Agriculture Organization still expects stocks to decline.

According to the United States Department of Agriculture there are currently 251m tonnes of cereal grain held in intervention around the world, equal to 60 days supply.

This is the lowest stocks have been during the last 30 years and contrasts sharply with a high of 132 days‘ supply in 1986/1987.

“Production prospects are good, but not up to expected total levels of utilisation,” said Henri Josserand, chief of FAO‘s Global Information and Early Warning System.

“The downward trend in global cereal stocks continues, narrowing the buffer 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 said.