In its first major forecast for 2014, FAO puts cereal production at 2.458 billion tonnes (including milled rice), down some 2.4% from the 2013 record, though global output is still expected to be the second largest ever.
The decline is likely to be more pronounced for coarse grains. Still, inventory levels remain fairly good. Analysts say there is no cause for concern at this early stage before the main 2014-15 seasons get underway -- assuming trade flows are not negatively affected by tensions in the Black Sea region.
Overall, world cereal stocks are expected to remain at relatively comfortable levels, according to the report, a biannual publication which provides information on the short-term market situation and outlook for major food stuffs. Lower pricing and El Niño weather conditions may keep world rice production lower in 2014, especially in Asia. In Thailand, a softening of producer prices could be the main factor leading to a contraction in rice planting and production.
While production may be lower, international trade could expand to record levels in 2014, sustained by ample supplies in exporting countries and increased purchases by traditional importers like Bangladesh, Indonesia and the Philippines.
The 2014 global food import bill could stabilize at $1.29 trillion but animal product bills are set to increase, sustained by rising trade volumes and prices, the report says.
The economic recovery in traditional markets such as the U.S. and the E.U. is boosting overall demand for fish and fishery products, along with the already firm interest of emerging economies like Brazil and Mexico.
In 2013-14, oil and meal prices moved upward, reflecting a tight balance in the U.S., slowed growth in palm oil production, and cuts in soybean production estimates.
Global consumption of both oils and meals is set to continue expanding, stimulated by higher supplies and driven by growing demand in developing countries in Asia, though consumption could grow less than expected, amid firm international prices and ample maize availability.
FAO also issued its monthly Food Price Index, which averaged 209.3 points in April 2014, down 3.5 points, or 1.6%, from March, and 7.6 points, or 3.5%, below April 2013. Last month's decline was mostly caused by a sharp drop in dairy prices, although sugar and vegetable oil also fell. By contrast, cereals and meat prices were slightly firmer.