FAO/GIEWS - Food Outlook July/August/September 1997

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World carryover cereal stocks in 1997/98 are now forecast by FAO at 280 million tons, close to the relatively low level in the previous year. This latest forecast is 14 million tons less than earlier anticipated, due largely to a significant reduction in the coarse grain stocks expected to be held in the United States following a deterioration in 1997 production prospects. Global end-of-season rice stocks are also tentatively forecast to decline in 1998, primarily due to smaller carryovers projected in China and India. The forecast of ending wheat stocks among the major exporting countries shows little change from last season while an increase is expected in ending stocks held in aggregate by the importing countries. At the current forecast volume, the global ratio of end season cereal stocks in 1998 to trend utilization in 1998/99 would be near 15 percent, about the same as the current season, but still significantly below the 17-18 percent range the FAO Secretariat considers the minimum necessary to safeguard world food security.


Crop year ending in:

1996 1997 estim. 1998 f'cast

(. . . . million tons . . . .)
Wheat 102.9 109.9 121.1
Coarse grains 100.8 117.9 107.8
Rice (milled) 54.0 54.7 50.6
TOTAL 257.7 282.5 279.5
of which:

Main exporters 73.9 103.1 101.8
Others 183.8 179.4 177.7


World wheat stocks for crop years ending in 1998 are now put at 121 million tons, some 10 million tons more than last season. However, the wheat stock-to-utilization ratio of about 20 percent is still one of the lowest since the mid-1970s. Ending aggregate wheat inventories of the major exporting countries are expected to be up slightly from their opening levels because anticipated larger ending stocks in the United States are likely to offset smaller carryovers in Australia, Canada and the EC. Elsewhere, wheat carryovers are anticipated to rise in Asia, in particular in China, India and Pakistan, and in the CIS where a bumper wheat crop is likely to boost stocks in the Ukraine. By contrast, ending wheat stocks are anticipated to drop sharply from last year in northern Africa following severe droughts in Algeria, Morocco and Tunisia.

The largest decline among global cereal stocks in 1997/98 is forecast for coarse grains which are now expected to drop by 10 million tons from last year to about 108 million tons. Except for 1995/96, this would be the lowest level in 14 years. The downward adjustment from the last report is largely the result of a substantial reduction in the forecast of U.S. inventories, which normally represent two-thirds of the total of major exporters. As for wheat, the drought in North Africa is expected to also reduce the coarse grain carryovers in that region, and smaller crops in China and India are also expected to result in lower ending stocks in Asia as a whole. Smaller carryovers in 1997/98 are also forecast in South America due primarily to reductions in Brazil and Colombia. The only significant build-ups of ending stocks are expected in the CIS, in particular the Russian Federation and the Ukraine, and in Mexico.

FAO’s forecast for world rice stocks at the end of the marketing seasons in 1997 has been raised to 54.7 million tons, 0.7 million tons above the 1996 level but 10 percent below the five-year average. The projected increase in stocks would be the first in four years. The expected rise in stocks in developing countries, which hold over 90 percent of world rice stocks, will more than offset a slight decline in stocks estimated for the developed countries. However, substantial shifts in the rice stocks of some countries are anticipated. In India, total stocks are forecast to drop by 17 percent from 1996 to 15 million tons, the lowest in 8 years. High wheat prices have led to an increase in rice consumption resulting in a fall in stock levels. By contrast, stocks in Japan are anticipated to increase by 26 percent to 3.7 million tons, as a result of surplus production and imports under its Uruguay Round commitments. With no production increase anticipated for 1997 and rising consumption, world rice stocks at the end of the marketing seasons in 1998 are tentatively forecast to decline to 51 million tons, representing about 13 percent of the expected world consumption, the lowest in 22 years.

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