Current world cereal production estimate for 2018, incorporating Chinese historical production revisions, stands at 2 655 million tonnes (including rice in milled terms), the U.N. food agency said in its latest monthly report.
Although this figure is 46 million tonnes higher than the previous month’s estimate, world cereal production is still down 1.8 percent (48.8 million tonnes) year-on-year, largely on account of lower maize and wheat output figures that more than offset increases in rice and sorghum production, the FAO said.
The forecast of global cereal utilization in 2018/19 has also been raised to 2 683 million tonnes, up 1.2 percent (32 million tonnes) from March and 1.1 percent (28 million tonnes) from the 2017/18 level. The bulk of this month’s revision again stems from the upward adjustments made for China. World wheat utilization in 2018/19 is set to reach an all-time high of 748 million tonnes, some 0.8 percent (6.3 million tonnes) above the previous forecast and 1.2 percent higher than in 2017/18.
The increase from last month, FAO said, reflects higher estimates not only for China but also for the Russian Federation, while the year-on-year expansion is largely driven by rising food use and strong demand in Asia. Mostly because of higher maize utilization estimates for feed in China, the latest forecast for 2018/19 global total utilization of coarse grains has been raised from the previous month’s estimate by 1.7 percent (24.3 million tonnes) to 1 425 million tonnes, representing a 1.1 percent increase from 2017/18. World rice utilization in 2018/19 is pegged at 511 million tonnes, up slightly from March and 0.8 percent (4.1 million tonnes) from 2017/18.
FAO’s new forecast of global cereal stocks for crop years ending in 2019 has been scaled up since the previous report by almost 11 percent (82 million tonnes) to 849 million tonnes, largely reflecting revisions to maize, wheat and rice inventory estimates in China.
While historical levels have been revised upwards, world cereal stocks in 2018/19 are expected to decline by 2.9 percent from their opening levels, resulting in a drop in the ratio of global cereal carryovers to utilization (stock-to-use) from a relatively high level of 32.6 percent in 2017/18 to 30.7 percent in 2018/19. The forecast for global wheat stocks, though raised by 2.3 million tonnes from last month to 267 million tones, still points to a 5.0 percent reduction from the record opening level, mostly on drawdowns in the EU and the Russian Federation.
For coarse grains, the report said, forecast for global stocks has been lifted from last month by 76 million tonnes to 400 million tonnes, but still 4.3 percent below their opening levels. The sharp change in this month’s forecast mirrors the upward revisions to inventories in China and to a lesser extent in the EU, South Africa and the United States.
World rice stocks at the close of 2018/19 are predicted to reach an all-time high of 181 million tonnes, up 3.8 million tonnes from March and 6.9 million tonnes higher than their opening levels. This month’s global rice inventory adjustment reflects higher estimates for China, but also an upward revision to carry-overs in India, given expectations of a bumper crop in 2018 and a strong pace of public domestic procurement in the country.
FAO’s forecast for world trade in cereals in 2018/19 has been lowered marginally since last month to 412 million tonnes, down 2.2 percent from 2017/18. World wheat trade is pegged at 170.5 million tonnes, almost unchanged from March and down 3.6 percent from the previous season’s peak.
At 195.0 million tonnes, total trade in coarse grains is seen heading to a small contraction from 2017/18, with reduced import demand for barley and sorghum more than offsetting bigger maize purchases, especially by the EU and several countries in Asia, FAO said.
World rice trade in 2019 is set to contract by 2.6 percent to 46.6 million tonnes, down 500 thousand tonnes since March, with lower expected exports by India accounting for most of the downward revision, it added.