World wheat output forecast to fall in 2018/19, the first in six years – IGC

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Global wheat output is seen falling in 2018/19 for the first time in six year, the International Grains Council (IGC) said in its first forecast for next season even as it hiked the estimate for global production in 2017-18.

The Council’s initial projection for world wheat production in 2018/19 is for a 2% fall y/y, to 742m t. With sustained growth in consumption, the first stocks contraction in six years is possible, mainly in the major exporters, the report said.

“Global trade could set a record, underpinned by stronger shipments to Africa and Asia. India may be a larger importer in the year ahead,” it added.

At 2,100m t, the forecast for global total grains (wheat and coarse grains) production in 2017/18 is 21m higher m/m (month-on-month) and only 2% less than last season’s record, the report said.

Most of the change is for wheat (including for Russia, Canada, Argentina and Australia) and maize (the EU, the USA, China, Nigeria and Ethiopia).

  • Total grains production in 2017/18 is expected to be only modestly below the record of the year before.
  • As demand growth is forecast to exceed the increase in total supply, grains stocks are projected to fall for the first time in five seasons.
  • Led by higher maize shipments, grains trade is predicted to expand to a new peak.
  • China’s soyabean imports are anticipated to total at least 100m t, as global trade advances by 4% y/y, to a record.
  • World rice stocks are seen slightly tighter y/y as accumulation in China only partially compensates for a drop in the major exporters.

Mainly because of adjustments to historical figures for maize in China, the forecast for world total grains stocks is boosted sharply from before, to 617m t, although this still represents the first contraction in five years (-5m).

The report said that with improving prospects for Brazil’s outturn more than offsetting marginal downgrades for Argentina and the USA, the 2017/18 world soyabean production forecast is lifted by 1m t, to 349m, fractionally short of the previous year’s high.

“Due to a reduced figure for opening stocks and with consumption unchanged from before, global inventories are cut slightly, to 40m t. This represents a modest y/y contraction, with major exporters’ reserves down by 11%,” the report added.

Trade is forecast little changed from previously, at a peak of 153m t, underpinned by growing sales to markets in Asia.

Reflecting upgrades for some producers, including China, the outlook for world rice output in 2017/18 is lifted by 2m t, to 484m, fractionally lower y/y.

“Together with a larger figure for carry-ins, the overall increase in supplies is channelled to higher consumption, mainly in Africa, and ending stocks, which are placed at 123m t, down by 1% y/y,” the report said.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He also advises companies on thought leadership imperatives.

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