It said that high commodity prices encouraged planting and combined with favourable weather conditions to result in a 5.3 per cent production expansion from last year, to a total of 2242 million tonnes. The biggest rise is in wheat production which is up 11 per cent, and the FAO said it expects world grain supply to be more than sufficient to meet demand for the first time in four years, allowing global stocks to recover in the short term.

On a cautionary note, however, it added: “In 2008/09, ethanol production will account for the largest expansion in total cereal utilisation in the United States and for nearly one-half of the total gain in world cereal utilisation.”

It also said that in low-income countries in particular, lower commodity prices had not yet translated into lower food prices.