HAMBURG (April 11 2003) : Weaker global wheat and soyabean prices thisyear were forecast on Thursday by the AIECE European working group oncommodity prices.

The working group comprises representatives of economics researchinstitutes from Germany, France, Finland, the Netherlands, Poland andSlovenia.

The report said dry weather in the US, Canada, Australia and India cutglobal wheat and feed grain output last year and supported prices.

"Under normal weather conditions this year, a substantial increase inproduction can be expected," said a statement from a German working groupmember, the Hamburg economics institute HWWA.

"This means prices have already fallen in recent months.

For the rest of this year a further light fall is expected which couldcontinue until the end of this year."

"Record soyabean harvests in southern hemisphere countries coming onto themarket will put pressure on soyabean prices," it added.

"In addition the soyabean crop in the US is expected to be large undernormal weather conditions."

Higher energy costs this year could make nitrogen fertilisers moreexpensive, it said.

This could encourage farmers to grow more soyabeans instead of wheat.

"Price pressure will be limited by strong demand for soyameal and soyaoiland a short supply of other oilseeds," it said.

Meanwhile, it said Brazil's 2003-04 coffee crop is forecast to fall,reducing world supplies.

"Although the period of very low coffee prices seems to be coming to anend, good stocks will prevent significant price rises."

"The world cocoa market will probably show a deficit for the third year ina row, which will lead to higher prices."-Reuters