New York (ABC Live): Global Cereal Supplies : Global cereal supplies are likely to remain abundant in the 2017/18 season. Markets of the major coarse grains are expected to be particularly well supplied following record maize harvests in South America. While wheat availabilities are also seen ample, supplies of high protein wheat could become tighter in view of a deteriorating crop outlook in the United States. As for rice, current prospects point to a modest production gain, giving way to a comfortable global supply situation in 2017, although much will still depend on the growing conditions in the next few months.
Cereal production to remain high in 2017, but below the 2016 record
- FAO’s forecast of global cereal production in 2017 was trimmed by 1.2 million tonnes and now stands at 2 593 million tonnes, 0.6 percent below the 2016 level. The month-on-month decline reflects cuts to world barley and wheat outputs, largely in the EU.
- Global wheat output in 2017 is forecast at 739.9 million tonnes, nearly 3.3 million tonnes (0.4 percent) below June expectations. The downward revision is almost entirely on account of smaller crops in the EU and Ukraine, where dry conditions are anticipated to reduce yields.
- World coarse grain output is forecast at 1 350 million tonnes, 1.9 million tonnes more than forecast in June. The upward adjustment mainly reflects improved prospects for global maize output, as larger than previously expected plantings bolstered the production outlook for the United States, adding to foreseen increases in Southern Africa as a result of improved weather. These positive revisions more than outweighed a cut to barley and maize forecasts for the EU, where recent dry weather dampened the production outlook.
- Global rice production in 2017 is now pegged at 502.9 million tonnes, 0.6 percent above the 2016 all-time high and marginally up from June expectations. The small upward revision mirrors prospects of somewhat larger plantings in Asia, coupled with improved yield outturns in South America. These changes were partly offset by reductions made for the United States, owing to subdued price prospects and flood damages, and for Viet Nam due to inclement weather.
Cereal utilization to rise modestly in 2017/18 but not enough to affect world inventories
- World cereal utilization is heading towards a 0.5 percent year-on-year expansion in 2017/18 to 2 584 million tonnes.
- While a decline in feed use is expected to lower the overall use of wheat in 2017/18, total utilization of maize is set to expand by 2.1 percent and rice consumption to increase by 1.2 percent.
- Given the modest projected increase in global cereal utilization, world total cereal stocks are forecast to expand further, reaching a new record high of around 704 million tonnes, up marginally from last month’s forecast.
- World wheat inventories are likely to increase the most, climbing to an all-time high of 256 million tonnes, up 3.5 percent from their already high opening levels. This would result in the 2017/18 stocks-to-use ratio for wheat remaining steady at around 34 percent.
Wheat to drive a contraction in world cereal trade in 2017/18
- FAO has raised its forecast of world trade in cereals in 2017/18 by 4 million tonnes since last month to 395 million tonnes. The revised level continues to suggest a 2.3 million tonne (0.6 percent) trade contraction from the 2016/17 estimated volume.
- Global wheat trade is forecast to fall by 1.4 percent to nearly 172 million tonnes in 2017/18, mostly on expectation of lower imports by Morocco and India. The latest forecast is up marginally from last month.
- World trade in coarse grains in 2017/18 is currently forecast to remain close to the 2016/17 estimated level, at around 178.8 million tonnes, with expected slightly higher exports of maize and barley offsetting a likely decline in sorghum. The latest forecast is 3 million tonnes higher than reported last month, primarily reflecting higher import forecasts for Canada, Egypt and the EU.
- World trade in rice in calendar year 2018 is now pegged at 44.4 million tonnes, close to a revised forecast of 44.2 million tonnes for 2017. On the demand side, growth prospects in 2018 are partly dampened by expectations of improved local availabilities in Asia, which could permit Bangladesh, Indonesia and Sri Lanka to curb imports.