World cereal supplies remain ample, 2017 wheat crop to remain above-average but below last year

02.03.2017

» The global cereal supply and demand situation in 2016/17 has remained broadly comfortable for the third consecutive season, as evidenced by fairly high cereal stocks-to-use ratios and relatively low prices.

» With the bulk of the 2016 crop already gathered, FAO estimates world cereal production in 2016 to amount to 2 600 million tonnes, up 7.9 million tonnes (0.3 percent) from February expectations, mainly reflecting improved prospects for wheat in Australia, maize in Ukraine and rice in India.

» FAO’s first forecast of global wheat production in 2017 stands at 744.5 million tonnes, indicating a 1.8 percent decline from the 2016 record level but still above the last five-year average. The year-on-year decline would mostly reflect the projected decrease in plantings in North America, and a return to normal production levels in Australia following an exceptionally high output this season.

» Prospects for 2017 coarse grains production in southern hemisphere are generally favourable, with crops (mainly maize) in their final development stage. Prospects for 2017 paddy crops along and south of the Equator remain mixed.

» The forecast of world cereal utilization in 2016/17 has been raised by 11 million tonnes since February to almost 2 578 million tonnes, mostly reflecting a significant upward revision to post-harvest loss estimates for the 2016 wheat crop in India, as well as higher anticipated use of maize for feed in China and Mexico.

» FAO’s February forecast of world cereal stocks at the close of crop seasons ending in 2017 has been lowered by about 3 million tonnes, mainly reflecting downward adjustments to wheat inventories in India. At 678 million tonnes, the revised cereal carryover forecast would still be 2.5 percent (16.8 million tonnes) higher than a year earlier.

» World trade in cereals in 2016/17 is forecast to reach nearly 393 million tonnes, slightly more than predicted in February, but still 0.4 percent (1.8 million tonnes) below the 2015/16 level. All of the annual contraction in world cereal flows is expected to be driven by a sharp reduction in the trade of coarse grains, while global trade in both wheat and rice is projected expand.

 

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