MILAN (Reuters) - The United Nations' Food and Agriculture Organisation (FAO) has raised its forecast of 2008 world paddy rice production by more than 1 million tonnes to 668 million tonnes after improved harvests in India and some other major producers.

The 2008 world production is 1.5 percent higher than a record output of 658 million tonnes in 2007, FAO said in a rice report released late on Friday.

"The abundant new 2007 paddy crops together with good prospects for the 2008 paddy season are easing the global rice market situation after world prices had jumped to record levels in April and May 2008," the Rome-based agency said

World rice prices would remain under downward pressure in the next few months, especially if wheat prices kept falling, but import interest from Africa and Middle East would keep them from dropping below a floor level, FAO said.

The FAO has raised its forecast of world rice inventories at the close of the 2008 marketing seasons by about 4.0 million tonnes to 110 million tonnes, 1.7 percent larger than their opening level of 108 million tonnes.