IGC revises down global grain production forecast

The International Grains Council (IGC) has cut its 2019/20 forecast for total grain production, which comprises wheat and coarse grains, to 2148 million tonnes, down 8 million tonnes from the June estimate.

The inter-governmental body lowered its 2019/20 global wheat crop forecast by 6 million tonnes to 763 million tonnes, reflecting diminished crop outlooks in Russia, the European Union and Canada.

Meanwhile, maize crop is expected to be the second-largest ever, and barley production is seen as the highest in a decade, the report said. Because of smaller stocks at the start of the season, overall grains supplies are predicted to hit a four-year low.

Consumption is seen reaching a new high of 2184 million tonnes, up 1 per cent year on year, which includes gains for food, feed and industrial uses, but down 3 million tonnes from the June estimate.

A third successive contraction of global stocks is forecast at the end of 2019/20, with the rate of drawdown accelerating to 36 million tonnes.

This entirely reflects tightening maize inventories, down 50 million tonnes year on year, while carryovers of other grains are forecast to expand, including of wheat (up 9 million tonnes) and barley (up 3 million tonnes).

The anticipated drop in maize stocks is centred on China, down 26 million tonnes on 2018/19, for which supply and demand assumptions are highly tentative. The US maize carryover is projected to shrink by 18 million tonnes over the year to a six-year low.

The IGC’s forecast for the crop in the United States, the world’s top producer, was unchanged at 333.5 million tonnes.

Global soybean production in 2019/20 was seen at 348 million tonnes, marginally below a previous forecast of 349 million reflecting a downward adjustment for the United States. World grain trade is projected to climb by 1 per cent over 2019/20, and shipments of wheat, barley, sorghum and oats are expected to rise, but the first fall in maize trade in 11 years is foreseen, led by reduced EU buying.

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 can be reached at shekhar.ghosh@indoasiancommodities.in.

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