FAO raises its global wheat and maize output forecasts

World cereal production in 2016 is anticipated to fall slightly short of projected demand in 2016/17, which would bring global end-of-season inventories in 2017 somewhat below their near record 2016 level, the UN food agency said in its latest monthly report.

Supply prospects improved in recent months, on larger than earlier projected stocks at the beginning of the 2016/17 marketing season and more buoyant expectations about 2016 production, it said.

cereal prodcutionFAO forecast world cereal production in 2016 at around 2 543 million tonnes, 0.6 percent higher than in 2015 and only 0.7 percent below the 2014 record high, and added that tt that level, production would be 17.3 million tonnes larger than was expected in May, reflecting upward revisions for wheat production in Argentina, the EU and the Russian Federation, as well as for maize in Argentina, Canada, the EU and the United States.

Compared to 2015, world wheat production is likely to decline, while rice and coarse grains outputs are forecast to increase, the report said.

It said world cereal utilisation in 2016/17 is currently put at nearly 2 546 million tonnes, or 0.9 percent above the 2015/16 estimate. The forecast is 3.5 million tonnes lower than reported in May, because global feed use of wheat was revised down. Total utilization of wheat is now foreseen to even decline by 0.1 percent in 2016/17.

According to the report, the forecast for global cereal stocks by the end of seasons in 2017 has been lifted by 27 million tonnes since May and now stands at nearly 642 million tonnes. Higher forecasts for production, lower for utilization and historical revisions to China’s wheat inventory estimates are the main reasons for this month’s adjustment. At their newly predicted level, world stocks would be barely 1.8 million tonnes below their all-time high opening level.

At 369 million tonnes, global trade in cereals in 2016/17 is predicted to decline by 1.9 percent compared to 2015/16, mostly due to reduced import demand for barley and sorghum. The overall contraction in world cereal trade is likely to intensify competition for market share among major exporters, a prospect that could keep international prices in check, the report said.

 

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