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FAO: Better Harvests Might Ease Food Crisis

United Nations officials say there may soon be some relief from the global food crisis.

The U.N.'s Food and Agricultural Organization says 2008 is turning into a banner year for cereal crops, like wheat and rice.

An FAO report released Friday estimates global cereal production will increase by close to three percent this year, to a record 2.18 billion tons.

India is among the countries where production is increasing.

Indian officials say, thanks to adequate rains, they are expecting a "rich harvest" of rice, corn and soy. But they warn they do not expect to lift a ban on rice exports that helped send world rice prices soaring.

FAO officials also warn that while food prices may not rise further, they are likely to remain high because cereal production will barely outpace demand.

Tight corn (maize) supplies in the United States are also likely to prevent food prices from falling.

The FAO says, despite the surge in production, cereal reserves are still near a 30-year low.

Officials say one reason is that not all regions are benefiting from bumper crops.

The FAO cites unfavorable harvests in eastern Africa (Ethiopia, Somalia and parts of Kenya and Uganda) and parts of south Asia (Pakistan, Afghanistan, Iran and Tajikistan), as well as smaller plantings in Argentina.

Meanwhile, cooking oil prices may drop in the near future.

The price of palm oil - which is used to make cooking oil in Malaysia, Indonesia and other countries - has tumbled in recent days.

The benchmark price for crude palm oil in Malaysia fell more than one percent Friday to slightly more than $1,000 a ton.

The Indonesian government doubled the export tax on palm oil in April to help safeguard its domestic supplies, saying cooking oil prices had shot up 40 percent this year.

Some information for this report was provided by Reuters.