Total wheat utilization is projected to reach 730.5 million tonnes, including a big jump in use of lower-quality wheat for animal rations.
ROME, ITALY — Global food markets will likely remain "generally well balanced" in the year ahead, as prices for most internationally-traded agricultural commodities are relatively low and stable, the Food and Agriculture Organization of the United Nations (FAO) said.

The benign outlook, especially for staple grains, is poised to lower the world food import bill to a six-year low, according to FAO’s
Food Outlook.

Record global production forecasts for this year's wheat and rice harvests, along with rebounding maize output, are helping keep inventories ample and prices low. Worldwide cereal production in 2016 should rise 2.569 billion tonnes, up 1.5% from the previous year and enough to further boost existing inventories, the FAO said.

The value of total food imports is expected to fall 11% in U.S. dollar terms in 2016 to $1.168 trillion, as lower bills for livestock products and cereal-based foodstuffs more than offset higher bills for fish, fruit and vegetables, oils and particularly sugar. But the FAO said the decline is expected to be slower for economically more vulnerable nations, many of which have depreciating local currencies.

The FAO raised its forecast for global wheat production to 742.4 million tonnes, led by increases in India, the U.S. and Russia, which is poised to overtake the E.U. as the grain's largest exporter. Total wheat utilization is projected to reach 730.5 million tonnes, including a big jump in use of lower-quality wheat for animal rations.

Global rice production is predicted to expand for the first time in three years, increasing 1.3% to an all-time high of 497.8 million tonnes, buoyed by abundant monsoon rains over Asia and sizable increases in Africa. Coarse grain output is seen rising 1.8% on the year, buoyed by record crops in the U.S., Argentina and India, according to the FAO.

Cereal prices are drifting lower on the backs of the expected hefty supply. Wheat and maize futures on the Chicago Board of Trade have both dropped more than 16% since the start of the year, while quoted rice prices are at their lowest level since early 2008.

Production of cassava, a dietary mainstay in Africa where per capita consumption is above 100 kilograms annually, is projected to grow 2.6% this year to 288 million tonnes, the FAO said. However, China's shift to drawing down its maize stockpile for domestic industry and feed has curbed international prices and trade flows for cassava.

Soybeans and other oil crops may reach an all-time production high this year, thanks to record U.S. yields, although demand is expected to grow even faster.

The FAO Food Price Index, released on Oct. 6, averaged 170.9 points in September, up 2.9% from August and up 10% from a year earlier.

The increase was driven by a 13.8% monthly jump in the FAO Dairy Price Index, partly as a result of a sharp jump in butter prices benefiting exporters in the E.U., where dairy output is declining.

Palm oil prices also rose, helped by low stock levels in both exporting and importing countries, as did those of soy and rapeseed oil, lifting the FAO Vegetable Oil Price Index by 2.9% for the month.

The FAO Cereal Price Index, meanwhile, slipped 1.9% from the previous month and is 8.9% below its year-earlier level.

The FAO Food Price Index is a trade-weighted index tracking international market prices for the five key commodity groups. Its current level is the highest since March 2015. The sub-index for cereals is now at its lowest in a decade in deflated terms.