London, May 30 - Global wheat production is set to soar to a record high this year, taking some of the steam out of the food inflation crisis which has caused severe hardship and even rioting in several developing countries.
The London-based International Grains Council raised on Friday its forecast for world wheat production in 2008/09 by 5 million tonnes to a record 650 million tonnes.
The inter-governmental body said wheat prices had already fallen by 25 to 50 percent from peaks set in March, adding that the favourable outlook and India's successful harvest had helped to ease food supply concerns.
The IGC raised its crop estimate for this year's harvest in India, the world's second largest wheat producer after China, to 76.8 million tonnes, up from a previous forecast of 75.5 million and last year's 75.8 million.
The upward revision also reflected improved prospects in several countries in eastern Europe including Russia, Ukraine, Poland and Romania.
"Rains improved prospects in the EU, Russia, Ukraine and in the U.S. winter wheat areas," the IGC said.
The IGC put the 2007/08 wheat crop at 604 million tonnes.
The forecast remained below last week's projection from the United Nations Food and Agriculture Organization (FAO) that the wheat crop could reach 658 million. The United States Department of Agriculture earlier this month put the crop at 656 million.
The IGC also raised its estimate for wheat consumption in 2008/09 by 2 million tonnes to 632 million following the sharp setback in prices.
"Lower wheat prices should stimulate a recovery in food use in developing countries in Asia and Africa, and feed use will increase, especially in the EU and the US, because of tight supplies of other feeds," the report said.
World maize production in 2008/09 was projected at 763 million tonnes, up from a previous forecast of 762 million but still below the prior season's 777 million.
"In the U.S. cool and wet weather delayed seeding and crop emergence, reducing yield potential, but conditions remain favourable in the EU and China. High prices may stimulate more plantings in Argentina," the report said.
Prices for maize have been rising this year, boosted partly by a soaring crude oil market. Maize is used to produce motor fuel ethanol in the United States.
The IGC said world ethanol ouptut was continuing to increase with the rate of expansion likely to slow only slightly in 2008/09 despite strong grain markets, high construction costs and reduced credit availability.
"Soaring crude oil prices will support the profitability of the industry regardless of official production incentives," the IGC said, adding its initial projections suggested that the use of grain to make ethanol would rise 31 percent to 124 million tonnes in 2008/09.