FAO: Global cereal output heading for a new record

FAO's new forecast also points to greater food use of cereals, especially wheat and rice, while utilization of coarse grains for animal feed is projected to reach an all-time high.

FAO cereal production forecast for 2017 raised further

• The forecast for world cereal production in 2017 has been raised by 18.4 million tonnes since July to 2 611 million tonnes, slightly above the 2016 record. The bulk of the revision follows improved production prospects for wheat and coarse grains.
• Global wheat production in 2017 is now pegged at 748.8 million tonnes, up 8.9 million tonnes (1.2 percent) from July’s forecast. The upturn is mainly on account of improved production prospects in the Russian Federation, as beneficial rains have boosted yield expectations even further. This increase more than offsets downward revisions made for the United States and Canada, where dry weather continued to negatively affect yield prospects.
• Confirming expectations of another expansion, world coarse grains output is forecast at 1 359 million tonnes, 9.0 million tonnes (0.7 percent) more than foreseen in July. This month’s upward adjustment reflects higher forecasts for maize and barley outputs, particularly in Brazil and the Russian Federation.
• Global rice production in 2017 is now forecast at an all-time high of 503 million tonnes, up 0.5 percent from the revised estimate for 2016 and 0.5 million tonnes above July expectations. The revision is primarily the result of small upward adjustments to production forecasts for India, the Philippines and Thailand, more than compensating for downward revisions made for China and the Democratic People’s Republic of Korea.

Global cereal utilization in 2017/18 to expand faster than projected in July

• World cereal utilization is currently forecast to reach 2 591 million tonnes, 23 million tonnes (0.9 percent) higher than in 2016/17. This level represents an increase of 7.5 million tonnes from the forecast made in July, reflecting upward adjustments to overall consumption of wheat and maize.
• Wheat utilization in 2017/18 is now expected to approach the 2016/17 record level, as large global supplies stimulate food consumption, compensating for a forecast decline in the use of wheat for animal feed.
• Total utilization of coarse grains in 2017/18 is projected to expand by 17.6 million tonnes (1.3 percent) year-on-year, mainly driven by a 15 million tonnes (2.6 percent) growth in the feed use of maize to an all-time high of 592 million tonnes.
• FAO has also raised its July forecast of world rice consumption in 2017/18 to 506 million tonnes. This level would imply a 1.3 percent year-on-year increase, sustained by a 5.0 million tonne expansion in food use of the commodity to 406 million tonnes.

World cereal inventories to hit a new record

• As a result of this month’s large upward adjustments to wheat and coarse grain production forecasts, world cereal stocks are now seen hitting a new high of 719 million tonnes, up 13.8 million tonnes (2 percent) from their already high opening levels and 15 million tonnes (2.1 percent) above the July forecast. This level would keep the stocks-to-use ratio of cereals above the 20-percent mark for the fourth consecutive season.
• Global wheat stocks (ending in 2018) are forecast to hit an all-time high of 262 million tonnes. The new forecast stands 6 million tonnes above the July figure on expectations of buildup of inventories in the Russian Federation following a bumper 2017 harvest.
• The forecast of coarse grain inventories (ending in 2018) has also been raised by 8.7 million tonnes, mostly on higher-than-earlier anticipated build-ups of maize stocks in Brazil. At 233 million tonnes, the forecast for world maize inventories is up 7.6 million tonnes from July.
• Global rice inventories (ending in 2018) are forecast to exceed their opening levels by a small margin of 0.3 percent, reaching 171.2 million tonnes. Although improved crop prospects have led to upward adjustments for Brazil and India, these were mostly offset by downscaled forecasts for China, Egypt and the United States.

Cereal trade prospects for 2017/18 improve

• FAO’s forecast of world cereal trade in 2017/18 has been lifted by 8 million tonnes since July to a record 403 million tonnes, implying an 8.7 million tonne (2.2 percent) expansion from 2016/17.
• FAO’s forecast of international trade in wheat in 2017/18 (July/June) has been raised since July by almost 3 million tonnes on stronger import demand, particularly in Brazil and India. At around 175 million tonnes, global wheat trade would virtually be unchanged from the previous season’s record level.
• Global trade in coarse grains in 2017/18 (July/June) is heading towards a 5.4 percent annual expansion, with trade in maize likely reaching an all-time high of 144 million tonnes. This latest forecast of maize trade stands 4 million tonnes above July’s projection, reflecting higher expected imports by China, the EU, the Islamic Republic of Iran and Mexico.
• World trade in rice in 2018 is anticipated to reach 44.8 million tonnes, marginally above the current forecast for 2017, supported by firm demand in the Near East and West Africa.