Global cereal output still expected to reach an all-time high despite downward revisions, says FAO


Photo by Raphael Rychetsky on Unsplash

The UN food agency on Thursday reduced the world’s 2020 cereal production for a second consecutive month, by nearly 13 million tonnes, largely on expectations of diminished world coarse grains production, but global cereal output was still forecast at a record 2 750 million tonnes, surpassing the 2019 output by 1.6 percent.

The reduction in the world coarse grains production forecast reflects lower expectations for the maize output in the EU and Ukraine, where continued adverse weather has further reduced yield prospects, the Food and Agriculture Organization (FAO) said in its latest Cereal Supply and Demand Brief.

The global wheat production forecast for 2020 was also trimmed slightly this month, on lower output expectations in Ukraine and Argentina due to the impact of dry weather.

Prospects for the 2021 winter wheat crop, which is already being sown in the northern hemisphere, are generally strong, th FAO said, reflecting the expectations of increased plantings in response to higher prices in several main producing countries, notably in the EU.

FAO slightly raised its estimate of world total cereal utilization in 2020/21 to 2 745 million tonnes, which would represent a 1.9 percent increase from the 2019/20 level, mostly driven by upward revisions for wheat consumption in the EU.  

Cuts in world production forecasts this month for maize, wheat and rice, amidst a faster pace in exports in response to strong global import demand, are seen to result in lower inventories, especially among the major exporters. 

FAO has lowered its forecast for world cereal inventories by the end of seasons in 2021 by 13.6 million tonnes since October to 876 million tonnes, now falling below the 2017/18 record. The resulting global cereal stock-to-use ratio in 2020/21 stands at 31.1 percent, still highlighting relatively comfortable global supply prospects in the new season.

The FAO said it expects world cereal trade in 2020/21 to increase by 3.0 percent from the 2019/20 level to 451 million tonnes, with expansions predicted for all major cereals, led by a 4.7 percent anticipated increase in global trade in coarse grains.

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