Homepage

Search on site

To write the letter

Site map

We are on:

Ukrainian Grain & Oilseed Market

Ukrainian Grain&Oilseed Market

Home > News

Despite a cut in world cereal production, this year’s forecast output remains an all-time high

09.11.2020 10:48 "Agro Perspectiva" (Kyiv) — Further cuts in world cereal production forecasts this month for maize, wheat, and, to a lesser extent, rice, amidst a faster pace in exports in response to strong global import demand, are seen to result in lower inventories, especially among the major exporters.

FAO’s forecast for 2020 world cereal production is reduced for a second consecutive month, by nearly 13 million tonnes, largely on expectations of diminished world coarse grains production. Despite the downward revisions, global cereal output is still forecast at a record 2 750 million tonnes, surpassing the 2019 output by 1.6 percent. This month’s 10.1 million tonnes cut to the world coarse grains production forecast is driven by lowered maize production forecasts in the European Union (EU) and Ukraine, where continued adverse weather has further reduced yield prospects, as well as in the United States of America (USA) on a smaller acreage. The global wheat production forecast for 2020 is also trimmed by 2.3 million tonnes and now stands at 762.7 million tonnes, just short of the 2016 record level. This reduction largely rests on lower output expectations in Ukraine, as well as in Argentina, where persistent dry weather curtailed yield prospects. By contrast, world rice production in 2020 is forecast to increase by 1.5 percent year-on-year to a new record of 508.7 million tonnes. This level stands slightly (0.4 million tonnes) below October expectations, as somewhat less pessimistic prospects for output in Indonesia were outweighed by downgrades to production in Myanmar and Nigeria, in both cases reflecting the adverse impact of weather on main-crop output. Planting of the 2021 winter wheat crop has begun in the northern hemisphere. Encouraged by higher prices, farmers are expected to expand plantings in several main producing countries, notably in the EU where production could rebound in 2021 from the low outturn this year. In the USA, 2021 winter wheat planting is progressing at a generally quick pace and the sown area is expected to remain broadly unchanged on a yearly basis. However, a continuation of reduced rainfall in the southern and central parts of the Great Plains could curb yields. Similarly, scarce precipitation in the Russian Federation might stifle early crop development, while low soil moisture levels in Ukraine could lead to below-average planted area. In Asia, remunerative prices and generally ample agricultural input supplies are expected to sustain above-average wheat acreages in China, India and Pakistan.

World total cereal utilization in 2020/21 is forecast to reach 2 745 million tonnes, up marginally since October and 1.9 percent higher than in 2019/20. The forecast for total wheat utilization in 2020/21 is scaled up slightly this month, mostly on increased consumption expected in the EU, raising the global forecast to 758 million tonnes, up 1.0 percent from the 2019/20 level. Upward revisions for the feed use of coarse grains this month are balanced by lowered demand for non-food uses, keeping the coarse grains utilization forecast for 2020/21 unchanged from last month at 1 477 million tonnes, up 2.6 percent from 2019/20, driven largely by increased feed use. Fuelled by expanding food use, global rice utilization in 2020/21 is predicted to reach 510 million tonnes, also barely changed since October, but up 1.5 percent from the 2019/20 estimate.

The forecast for world cereal stocks by the close of seasons in 2021 has been lowered by 13.6 million tonnes since October to 876 million tonnes, just 0.5 percent above opening levels and now falling below the 2017/18 record. The resulting world cereals stocks-to-use ratio in 2020/21 stands at 31.1 percent, slightly below the 31.8 percent in 2019/20, but still relatively high from a historical perspective. The latest downward revision to stocks largely stems from a further sharp cut (10.8 million tonnes) in the global maize inventory forecast, with lowered stocks in several countries, including Brazil on stronger exports, China on greater domestic consumption, and the EU and the USA on reduced production prospects. This month’s cut negates previous expectations of growth in global maize stocks, now forecast to fall 2.5 percent below their opening levels, reaching their lowest level in five years, as well as global coarse grains inventories, now forecast just slightly below their opening levels at 281 million tonnes. The forecast for global wheat inventories is also lowered by 3.8 million tonnes this month, on lower expected stocks in the EU, the USA and the Russian Federation. Despite these downward revisions, global wheat stocks are still forecast to increase to 184 million tonnes, 1.9 percent above opening levels. However, if China is excluded from the forecast, global wheat inventories would likely contract by 3.7 percent, driven by expected declines in several leading wheat exporters, including Argentina, the EU and the USA, mostly due to reduced harvests. By contrast, continued build-ups in the major rice exporters are anticipated to keep world rice stocks at the close of 2020/21 essentially stable year-on-year, at 182.0 million tonnes. If confirmed, these trends would result in the global rice stock-to-use ratio falling only marginally below the year-earlier estimate, while the major exporters’ stock-to-disappearance ratio rising to a seven-year high.

FAO’s forecast for global trade in cereals in 2020/21 has been lifted since October to 451 million tonnes, now 3.0 percent higher than in 2019/20. The bulk of the upward revision this month and the year-on-year foreseen increase is attributed to global coarse grains trade, now forecast to rise by 4.7 percent from the 2019/20 levels. Scaled up maize imports by the EU to compensate for lower expected production and stronger-than-earlier anticipated sales by Brazil and the USA pushed up the global maize trade forecast by 3.8 million tonnes to 179.8 million tonnes, 3.7 percent above last season’s level. FAO’s forecast of world rice trade in 2021 (January-December) is pegged at 47.2 million tonnes, marginally changed since October and up 6.3 percent year-on-year. Global wheat trade continue to be forecast at a record 184.5 million tonnes in 2020/21 (July/June), slightly up from 2019/20 and unchanged since October. Larger expected sales by the Russian Federation since the previous forecast in October are balanced by anticipated reduced exports from Ukraine, on lower availability of exportable supplies. On the import side, foreseen greater purchases from Pakistan are countered by cuts in imports by the Philippines on expectations of reduced feed demand.

Agro Perspectiva

< Global food prices continue rising in October

All news for
09.11.2020

Global almond production for 2020/21 is forecast 15 percent higher to 1.7 MMT >

22.11.2024