World cereal stocks by the close of the seasons ending in 1998 are forecast at over 278 million tons, 7 million tons, or around 2 percent, below their opening levels and 1 million tons less than reported in September. Earlier reports pointed to a smaller decline from last year but the decrease now appears to be more substantial mainly because of upward adjustments to last years ending stocks.
The bulk of this years decrease in world cereal stocks is expected in coarse grains and rice carryovers, while wheat inventories are forecast to increase for the second consecutive year. At 278 million tons, the ratio of global cereal carryovers to trend utilization in 1998/99 would be slightly lower than 15 percent and would remain below the 17 to 18 percent range which the FAO Secretariat considers as the minimum necessary to safeguard world food security. Another disquieting feature is that, with the exception of last year, cereal stocks have fallen continuously since 1993. With this years decline, the reduction in ending stock levels between 1993 and 1998 would stand at over 100 million tons, with over 60 percent of this reduction having occurred among the major cereal exporters, especially the United States, but also Canada and the EC. The total decline in cereal stocks held by the developing countries, as a group, in recent years has been less significant, and mainly reflects the rebuilding of stocks in China, and to some extent also India, which have partly offset reductions elsewhere.
World stocks of wheat are put at 121 million tons for crop years ending in 1998, the estimate being almost unchanged from September and 10 million tons, or 9 percent, above last year. Aggregate wheat stocks held by major wheat exporters, which usually provide the main buffer against variations in world output, is anticipated to rise by almost 3 million tons to 38 million tons. However, among the major exporters, only the United States is forecast to end the season with larger carryovers. By contrast, carryover wheat stocks in Canada and the EC are forecast to fall below their opening levels mainly because of smaller production.
WORLD CARRYOVER STOCKS OF CEREALS
|Crop year ending in:|
|1996||1997 estim.||1998 f'cast|
|(. . . . million tons . . . .)|
Elsewhere, above-average to record crops in several countries, especially China and India, but also the CIS and several countries in eastern Europe, are expected to contribute to larger inventories. In the Ukraine, ending wheat stocks could double their opening volume, while large increases are also anticipated in Bulgaria and Hungary. By contrast, in Africa, most countries are likely to end the season with smaller wheat carryovers, particularly in northern Africa where wheat accounts for the bulk of the production and has been hampered by repeated droughts in recent years. On the other hand, little change is anticipated in the size of stocks in Latin America and the Caribbean.
Global coarse grain inventories for crop years ending in 1998 are currently forecast at around 105 million tons, more than 13 million tons, or 11 percent, below their opening levels and the second lowest level in 14 years. Aggregate coarse grain stocks held by the major exporters are forecast to decline only slightly, mostly on account of reductions in maize stocks in Canada which would more than offset a small increase in barley carryovers in the EC.
At the global level, this years sharp decline in world coarse grain carryovers would be mainly on account of a notable drop in maize inventories in Asia, particularly in China. After a record crop in 1996, this years maize production in China is forecast to be significantly smaller. Based on prospects of reduced harvests and a continuation of strong domestic demand from the animal feed sector and large exports, maize carryovers in China could be drawn down by as much as a half from last years peak. Among the other countries in Asia, millet and sorghum carryovers are also likely to decrease in India.
In Africa, coarse grain stocks are anticipated to fall in several countries, mainly because of reduced output. Barley inventories are expected to be reduced drastically in Algeria, Morocco and Tunisia, while maize stocks are anticipated to decrease in South Africa, Uganda and Zambia, and sorghum stocks to fall in Sudan. By contrast, in the CIS and eastern Europe, coarse grain carryovers are likely to remain mainly unchanged from last year or rise in some countries. Similarly, for most countries in South and Central America, this years ending stocks are likely to remain the same or increase. Larger maize carryovers are expected, especially in Brazil due to higher domestic supply, while in Mexico both sorghum and maize stocks could increase because of larger domestic production.
Global rice stocks at the end of the marketing seasons in 1998 are tentatively forecast to decline to about 52 million tons, down 3.7 million tons from their opening levels. This forecast is based on the preliminary production estimates for 1997, which do not anticipate any major increase from the previous year, while continued growth in consumption is expected. With regard to the marketing seasons ending in 1997, the forecast for total rice stocks has been revised upward by almost 1 million tons to 55.6 million tons. This would be about 1.4 million tons up from the estimated level for 1996. This revision mainly reflects this months upward adjustments to 1997 production. Among the major rice stock holders, carryovers in Japan, which have been rising steadily since 1992, are now expected to increase even further, to over 3 million tons which would be the highest in 10 years. This increase is mainly due to higher production and Uruguay Round related imports since 1995. By contrast, total rice stocks in India are expected to fall because of higher domestic demand than was anticipated earlier, mainly attributed to higher wheat prices.