Early prospects point to a likely rebound of 2.7 percent in global cereal production in 2019, following a decline registered in 2018, the U.N. food agency said in its latest report.
“Based on the conditions of crops already in the ground and on planting intentions for those still to be sown, and assuming normal weather for the remainder of the season, world cereal output is forecast to reach a new record level of 2,722 million tonnes (including rice in milled equivalent), that is 71 million tonnes higher than in 2018,” it said.
Among the major cereals, wheat, maize and barley would account for most of the rise in cereal production, with projected year-on-year increases of 2.5 percent, 2.2 percent and 6.1 percent, respectively, the FAO said, adding that global rice production is likely to remain close to the 2018 all-time high.
World cereal utilisation is set to increase by 1.5 percent in 2019/20, and reach a high of 2 722 million tonnes, matching the forecast production. The expansion would be most pronounced for coarse grains, with their utilisation expected to be up 1.3 percent from 2018/19, largely driven by strong demand for animal feed and industrial applications, the report said.
Global food consumption of cereals is also expected to increase, by at least 1.1 percent, due to the continued rise in world population. Food consumption of rice and wheat, the two leading staples, is projected to increase by 1.7 percent and 1.0 percent, respectively.
Based on FAO’s first forecasts for cereal production in 2019 and total utilisation in 2019/20, world cereal stocks would need to be drawn down marginally, by 0.7 percent, to 847 million tonnes, the lowest volume since 2016/17. Lower coarse grains and, to a lesser extent, rice inventories would account for most of the anticipated contraction in world cereal reserves.
By contrast, wheat stocks are set to increase, to their second highest level on record. However, the decline in cereal stocks would only result in a small drop in the global cereal stock-to-use ratio, to a four-year low of 30.1 percent, the report added.
World trade in cereals in 2019/20 is forecast at close to 413 million tonnes, up just 0.5 percent (2.0 million tonnes) from the estimate for 2018/19, but still 1.9 percent (8 million tonnes) below the 2017/18 high. Most of the anticipated decline is associated with a likely drop in maize trade; whereas trade prospects for most of the other cereals are positive, especially for wheat and rice.
Against a backdrop of overall comfortable supply and demand balances for nearly all the cereals, their international prices are likely to remain under pressure, at least through the first half of the 2019/20 season.