Contrary to earlier predictions, world cereal production is now forecast to contract by two percent rather than to expand by 1.2 percent as anticipated in June, Food and Agriculture Organization (FAO) of the United Nations said.

Unexpected supply shortfalls due to unfavorable weather events were responsible for this change in direction, according to Food Outlook report of FAO.

Global cereal stocks are forecast to decline sharply and Food Outlook makes a strong call for production to be stepped up to replenish inventories. World cereals stocks are anticipated to shrink by seven percent according to FAO, with barley plunging 35 percent, maize 12 percent and wheat 10 percent.

Only rice reserves are foreseen to increase, by six percent according to the report.

“Given the expectation of falling global inventories, the size of next year’s crops will be critical in setting the tone for stability in international markets,” FAO said.