FAO: World cereal production prospects trimmed and stocks heading sharply lower in 2018/19 July 5, 2018
Latest indications continue to point to a reduction in cereal output in 2018 and negative prospects for the cereal supply outlook for the forthcoming 2018/19 marketing season. Based on the condition of crops already in the ground and assuming normal weather for the remainder of the 2018 cropping seasons, FAO's forecast for world cereal output this year is pegged at 2 586 million tonnes (including rice in milled terms), 64.5 million tonnes (2.4 percent) less than the record output in 2017. The year-on-year decrease mostly reflects anticipated reduced maize output. A predicted decline in the 2018 wheat production also weighs on global prospects, while rice output is seen expanding to fresh peaks in 2018. The latest forecast for cereals is down nearly 24 million tonnes from June, mainly on lower than previously anticipated projections for wheat production in the EU as well as wheat, maize and barley production in the Russian Federation and Ukraine.
World cereal utilization is forecast at 2 641 million tonnes, 26.5 million tonnes (1.0 percent) higher than in 2017/18, but below the June forecast following downward adjustments to overall consumption of wheat and barley. Total utilization of all major cereals is likely to continue growing in 2018/19, keeping pace with rising food demand, while overall feed and industrial uses are also likely to expand further.
If current production forecasts materialize, cereal output would not be sufficient to meet the expected total utilization requirements in 2018/19 and, as a result, global cereal stocks accumulated over the past five seasons would have to be drawn down to 749 million tonnes, over 7 percent down from their opening levels. At the current levels of utilization and stock forecasts, the stock-to-use ratio would drop from 30.6 percent in 2017/18 to 27.7 percent in 2018/19, its first decline in four years, while still well above the record low of 20.4 percent registered in 2007/08. Among the major cereals, the drawdown in maize inventories is expected to be the largest. Wheat and barley stocks are also forecast to decline, while rice ending stocks could increase for the third consecutive season.
World trade in cereals is expected to remain generally robust in 2018/19. Wheat trade is seen exceeding the previous season’s level, but to still remain short of the peak registered in 2016/17. Global trade in coarse grains is forecast to hover around record levels, supported by strong import demand for maize, barley and sorghum. International trade in rice in both 2018 and 2019 is also predicted to remain close to the 2017 all-time record.
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