The United Nation's Food and Agriculture Organization's (FAO) March 2011 edition of the Crop Prospects and Food Situation report is forecasting world wheat production in 2011 at 676 million tonnes, which represents an increase of 3.4 per cent from 2010.

This level would still be below the bumper harvests in 2008 and 2009.

The March, released on Wednesday, specified that wheat plantings in many countries have increased or are expected to increase this year in response to strong prices, while yield recoveries are forecast in areas that were affected by drought in 2010. The Russian Federation is expecting a yield recovery.

As the bulk of the world's coarse grains and paddy crops are yet to be planted, it is, however, too early to forecast total cereal production for this year.

Looking back to last year's production, the FAO report notes that in the low-income food-deficit countries (LIFDCs) as a group, the 2010 cereal output rose by 5.6 per cent, a development that will result in reduced cereal imports in the 2010-11 marketing years.

But this will not necessarily spell much relief for these countries as their overall cereal import bill is estimated to increase by 20 per cent because of higher international prices.