Record global cereal production forecast boosts stock-to-use ratio to a 20-year high

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Photo courtesy: Asian Development Bank

The U.N. food agency revised its forecast for world cereal production in 2020 upward by 9.3 million tonnes this month and now stands at almost 2 790 million tonnes, with the global output set to surpass the record-high reached in 2019 by as much 3.0 percent (81.3 million tonnes).

Global wheat production is pegged at 761.5 million tonnes, up 3.2 million tonnes from the previous month and now at par with last year’s above-average outturn, the Food and Agriculture Organization (FAO) said in a latest report.

The bulk of the monthly increase reflects an upward revision to Australia’s wheat production forecast (+5.5 million tonnes), mostly resting on improved yield prospects underpinned by earlier widespread rainfall and favourable weather forecasts for the remainder of the season.

This, the FAO said, combined with a larger than initially foreseen wheat acreage, is expected to lead to a more pronounced production rebound in 2020, which would mark a significant turnaround compared to the previous two years of drought-reduced harvests.

Wheat production forecasts have also been raised for India (+2.2 million tonnes), based on recent official data pointing to a larger sown area and higher yields, and for the Russian Federation, where conducive weather boosted yield expectations, resulting in higher production prospects (+2.0 million tonnes).

These increases more than offset a cutback to the European Union (EU) wheat production forecast (-5.5 million tonnes) and the UK (-1.5 million tonnes) on reduced yield expectations. The forecast of world coarse grains production in 2020 has also been raised to 1 519 million tonnes, up 5.7 million tonnes from the preceding month and 5.0 percent (73.0 million) from 2019.

Larger outputs of barley in Australia, the EU and Turkey are mainly behind the monthly upturn. By a lesser extent, the forecast of world maize production has also been lifted since the previous month, reflecting modest increases in the EU, where recent rains following several weeks of dry weather benefited crops especially in southern France and northern Italy.

Likewise, Brazil’s maize output has been increased, now slightly exceeding the previous year’s outturn and marking an all-time high. FAO’s global rice production forecast for 2020 is now pegged at 509.2 million tonnes, up 1.7 percent from 2019 and 400 000 tonnes above June’s expectations.

The slight upward revision primarily reflects improved prospects for South American countries, where conducive weather raised yield expectations to all time-highs, promoting a partial output recovery from last year’s reduced harvest.

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