FAO: Record cereal production and near-record trade in 2019/20 Feb. 6, 2020
FAO’s new forecast for world cereal production in 2019 stands at a record high of 2 715 million tonnes, up by 2.3 percent (61.7 million tonnes) from the outturn in 2018. This month’s forecast remains nearly unchanged from December, as downward revisions made for wheat and rice production are offset by upward adjustments for maize and barley.
Prospects for the upcoming 2020 coarse grain harvests in the Southern Hemisphere (starting in March) are mixed. Argentina’s maize crop is set to benefit from favourable rainfall and a second consecutive year of an above-average sown area, stimulated by high domestic prices and strong export prospects. In Brazil, the minor season maize crop is in the vegetative stage under good conditions, while the sowing of the main season crop has been delayed by the slow pace of the soybean harvest. In South Africa, improved rainfall in recent months and an increase in the planted area point to a rebound in production to a near-average level.
In the Northern Hemisphere, where winter cereals are expected to be harvested in early summer, a contraction in winter sowings is expected in the United States. Similarly, EU wheat plantings are likely to decline compared to last year, as untimely heavy rains hindered sowing in France and the United Kingdom while suboptimal growing conditions were experienced in some other countries. Official estimates confirmed a reduction in wheat plantings also in Ukraine, although favourable weather has augured well for yield prospects. By contrast, in the Russian Federation, official estimates show a record planted area for winter wheat, and the upcoming spring wheat area is also expected to expand from 2018/19. In India, larger-than-anticipated plantings and beneficial weather could keep wheat production close to last year’s record level. Similarly in Pakistan, conducive weather conditions have reinforced expectations that the country’s harvest could reach the target of 27 million tonnes set by the Government. In China, growing conditions of the mostly dormant wheat crop are normal, except in some central provinces where slight rainfall deficits were recorded.
The forecast for world cereal utilization in 2019/20 has been lifted slightly since December to 2 714 million tonnes, up 1.2 percent (31.3 million tonnes) from its 2018/19 level. This month’s revision mostly reflects a sizeable official upward adjustment to maize feed use estimates in the United States, which more than offset downward adjustments in Brazil resulting from higher-than-earlier anticipated exports. The increase in feed use raises the total coarse grain utilization forecast for 2019/20 to 1 439 million tonnes, up almost 1 percent (13.5 million tonnes) from 2018/19. The FAO forecast for total wheat utilization is nearly unchanged from December, at a record level of 759 million tonnes, 1.5 percent (11.2 million tonnes) above 2018/19. As for rice, downward revisions in the Lao PDR and Myanmar have outweighed higher utilization prospects for Bangladesh, India and Thailand, resulting in a cut in FAO’s forecast of world rice utilization in 2019/20 of 1.0 million tonnes (0.2 percent) to 516 million tonnes. At this level, world rice use would still stand 1.3 percent above the revised 2018/19 estimate, with all of the growth stemming from an expected expansion in food intake.
The forecast for world cereal stocks by the close of seasons in 2020 stands at 863.3 million tonnes, almost unchanged from December and marginally lower than their opening levels. The global cereal stock-to-use ratio in 2019/20 is projected at 30.9 percent, slightly below the 2018/19 level but still a comfortable level historically. The forecast of wheat inventories was lowered by 3.6 million tonnes from its December level but still up 1.4 percent from the previous season. This month’s revisions mostly reflect downward adjustments among major exporters because of larger exports and higher domestic use in the EU, Ukraine and the United States. By contrast, despite an upward revision since December, total coarse grain stocks are still forecast to contract by 1.6 percent (6.6 million tonnes) in 2019/20, largely as a result of expected reductions in maize stocks, particularly in China and the United States.
FAO’s latest forecast for world trade in cereals in 2019/20 is pegged at 420.2 million tonnes, up 4 million tonnes from December, representing the second highest on record and an increase of 9.4 million tonnes (2.3 percent) from the 2018/19 reduced level. At 174 million tonnes, wheat trade in 2019/20 (July/June) is set to rebound by 3.4 percent from 2018/19, reflecting stronger import demand in Asia, to be met by larger-than-earlier-anticipated exports by the EU and Ukraine, more than compensating for reduced sales by the Russian Federation. World trade in coarse grains in 2019/20 (July/June) has been raised month-on-month by 2.8 million tonnes, now 1 percent (2 million tonnes) above the 2018/19 level. Making up the bulk of this month’s upward revision in coarse grain trade, maize trade forecast continued to edge upwards, increasing by another 1.7 million tonnes, now short only one million tonnes of the 2018/19 record level. While larger maize imports by Viet Nam account for most of the latest upward revision in world maize trade forecast, maize sales by Brazil are foreseen to hit a new record of over 38 million tonnes, up 45 percent from 2018/19. FAO’s forecast of world rice trade in 2020 (January-December) has been lowered by 700 000 tonnes, amid prospects of more subdued Asian import demand, particularly from China and Iraq. As a result, world rice flows in 2020 are currently seen to reach 46 million tonnes, 4 percent higher than in 2019 but still short of the 2018 all-time high.