UNITED NATIONS, March 7: As prices of sugar and cereals plummeted, the Food and Agricultural (FAO) organisation said on Thursday that 2013 could be a bumper year for wheat crop world-wide.

“First forecasts for the 2013 wheat harvest point to production increasing to 690 million tons — 4.3 per cent up on 2012,” according to FAO’s quarterly ‘Crop Prospects and Food Situation report.

“This would be the second largest crop on record,” FAO noted in a press release, below the record harvest of 700 million tons in 2011.

The hike is expected mostly in Europe, driven by an expansion in wheat planting areas in response to high prices and a recovery in yields from Russia and some other countries, FAO said.

The outlook in the United States, dampened by earlier drought conditions, has improved somewhat, the UN agency said.

Coarse grains and paddy crops are not yet planted making it too early for even a preliminary global cereal forecast, but FAO expects “generally favourable” prospects for the first 2013 coarse grain crops in the southern hemisphere.

Rice prospects are also encouraging in several countries below the equator.

The report also surveyed the food security situations in developing countries, including several hotspots. Of the countries cited, FAO noted that insecurity in northern Mali has disrupted food commodity flows worsening an “already precarious” food situation created by a drought in 2011.

Meanwhile, FAO’s Food Price Index — which measures monthly changes in international prices of a basket of meat, dairy, cereals, oils and fats and sugar — remained at 210 points for a second straight month.

The FAO Cereal Price Index dropped less than 1 per cent to 245 points in February, but still 8 per cent higher than last year at this time.

Prices for oils and fats averaged 206 points, up 0.4 per cent from January. The rise was driven mainly by palm oil, reflecting the expected seasonal production slowdown and reduction in inventories.