Global cereal production heading for a record high in 2019, says FAO

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FAO’s latest forecast for 2019 world cereal production is pegged at an all-time high of 2 714 million tonnes, up some 0.4 percent from the November figure and now almost 57 million tonnes (2.1 percent) above the reduced outturn in 2018.

The month-on-month increase primarily reflects an upward revision to world coarse grains production, associated with higher-than-previously predicted yields in China, the Russian Federation and Ukraine.

At the current level, the forecast for world production of coarse grains stands at nearly 1 433 million tonnes, 1.7 percent (24.5 million tonnes) higher year-on-year and marginally short of the record high level registered in 2017, the UN food agency said in a statement.

Global wheat production forecast for 2019 has also been raised slightly since the previous month, to 766.4 million tonnes, 4.8 percent (34.8 million tonnes) above the previous year’s outturn. The bulk of the monthly revision resulted from upward adjustments to the production estimates in the European Union (EU), which more than offset a trimming of the output estimate in the United States, the statement said.

Planting of the 2020 wheat crops, for harvest next year, is well underway in Northern Hemisphere countries. In the United States, winter wheat sowings were almost complete at the end of November, a faster pace than the previous year but in line with the average timing.

According to the FAO, early indications suggest that the area sown may contract on lower price prospects compared to last year, while crop conditions were reported to be slightly inferior to normal levels.

In the EU, following early-seasonal rainfall deficits, improved precipitation in November helped to recuperate soil moisture levels, benefiting winter crop establishment. In far eastern and western parts of the EU, however, dry weather persisted, resulting in suboptimal planting conditions that may impede early crop development.

Conditions of the winter wheat crop were favourable in the Russian Federation, which, coupled with continued government support aiming to stimulate export growth, could boost the area sown. By contrast, in Ukraine, limited rains and warmer-than-average temperatures hampered planting of the winter wheat crop in key producing areas.

In the Southern Hemisphere, the FAO said, coarse grain crops are being currently sown while wheat crops will be planted later in the year. In South America, elevated grain prices, underpinned by robust export demand, are expected to sustain high levels of maize plantings in Argentina, despite unfavourable rainfall that hindered sowing operations, and in Brazil.

Similarly, in South Africa, the largest maize producer on the Africa continent, remunerative grain prices are foreseen to spur an increase in maize sowings, with preliminary indications pointing to an area that would surpass the five-year average.

However, the short-term weather forecast indicates likely reduced rains, a factor that may represent a downside risk to the production outlook in 2020. FAO’s forecast of world rice production in 2019 has been increased from November by 1.6 million tonnes to 515 million tonnes, implying a mere 0.5 percent output decline from the 2018 all-time high. Adverse weather and tight water supplies for irrigation dampened the outlook for off-season crops in Thailand and Viet Nam this month.

These adjustments were outweighed by area-based output upward revisions for Pakistan and various African countries, namely Egypt and Nigeria, which together with Madagascar are now set to spearhead a rebound in African rice production this season.

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