|No. 3||Rome, September 2004|
Coarse grains production
Source: FAO. Note: Totals computed from unrounded data.
FAO’s forecast for world coarse grain output has been raised significantly since the previous report, to 965.5 million tonnes, 3.4 percent up from last year and the largest output on record. Virtually all of the latest revision is attributable to an increased forecast for the United States where the season is progressing particularly favourably and production could increase by about 8 percent compared to the already good crop of 2003. Also in Europe, latest information still points to a significant recovery in production after the drought-reduced crops last year.
In Far East Asia, harvesting of the main 2004 coarse grain crops is just starting. Production in China is forecast to rise by 3.6 percent to about 131 million tonnes following increased plantings, as a result of government incentives to raise output, and favourable weather. Prospects also remain favourable in India after recent widespread rains and another above-average crop is expected as in 2003. Larger crops are also forecast in Indonesia and the Philippines.
In the Asian CIS subregion a sharply reduced coarse grain harvest (mostly produced in Kazakhstan) is being harvested due to adverse weather earlier in the season. The aggregate output is forecast at about 3.8 million tonnes, down by about 16 percent from 2003.
In North Africa, harvesting of the 2004 winter coarse grain crops is well advanced across the subregion. Aggregate output is forecast at about 12.5 million tonnes, similar to the previous year’s good crop reflecting favourable weather and adequate availability of agricultural inputs. A potential threat to some crops from Desert Locust was eliminated by timely control measures. In Egypt, the largest producer, the maize crop is expected to be 6.5 million tonnes, similar to last year’s about-average level.
In western Africa, rains have been generally regular and widespread over the main producing zones of the Sahel, and planting of coarse grains has been completed in most countries. Another above-average harvest could be obtained if the current threat from a Desert Locust upsurge is brought under control (See box on page.....). In the southern parts of the countries along the Gulf of Guinea, an average maize crop has been harvested while planting of the secondary maize crop is underway. In the northern parts, coarse grains are generally developing satisfactorily.
In Central Africa, growing conditions are favourable for the second maize crop being planted in Cameroon, where a satisfactory first maize crop was harvested. In Central African Republic, in spite of good weather conditions and seed distributions, production is not expected to recover significantly due to persistent insecurity.
In eastern African, prospects for the 2004 coarse grains to be harvested from October/November are generally unfavourable in most countries due to inadequate rains, and the subregion’s aggregate output is forecast to decline from the good level of last year. In Eritrea, an almost total failure of the secondary rains (March-June) and the late onset of the main rainfall season (June-September) have seriously affected crops. Similarly in Ethiopia, a poor secondary season followed by an erratic main season in several areas has adversely affected the harvest outlook. In Sudan, prospects are also unfavourable due to poor rains and large population displacement due to civil conflict. In Kenya, following erratic and below-normal rains, revised production forecasts now point to a 2004 main season maize output of about 2 million tonnes, down from the earlier forecast of 2.3 million tonnes. In Uganda, harvest of the 2004 first season coarse grains is complete and output was poor. The maize in eastern and central parts and the millet and sorghum crops in northern and north-eastern areas were affected by dry conditions. In Somalia, the main season maize and sorghum crop harvested in August was estimated at 125 100 tonnes, about 25 percent below average due to insufficient rains. In Tanzania, where the harvest is underway, latest forecasts point to a coarse grains output of 3.5 million tonnes, about 5 percent above last year’s average production.
In southern Africa, FAO's latest estimates of the recently harvested 2004 coarse grain crops indicate an aggregate output of 16.4 million tonnes, 4 percent lower than last year and 2 percent below average reflecting the delayed arrival of the rainy season and dry weather in north-eastern parts of South Africa. Production of maize, the main staple, decreased by about 6 percent compared to 2003, to 14.8 million tonnes. In South Africa, the subregion’s largest producer, the latest official estimate of maize production is 8.7 million tonnes, a 10 percent reduction from the above-average output in 2003. Maize production in Zimbabwe is estimated at about 1 million tonnes indicating a slight recovery from last year, the worst performance since the disastrous season of 1992/93. Harvests of coarse grains have been favourable in Zambia, Angola and Mozambique but unfavourable in drought-affected Lesotho, Swaziland and Malawi.
In Central America and the Caribbean, harvesting of 2004 main season coarse grain crops is about to start in Central American countries. Following a prolonged dry spell in several areas, production is likely to decline from last year’s same season’s level. In Mexico, planting of the important 2004 rain-fed summer maize crop is well advanced and planting intentions point to an increase of about 14 percent compared to previous year’s summer crop. In aggregate, the subregion’s 2004 maize production is tentatively forecast at 23.3 million tonnes, close to the good result of the previous year and above average.
In South America, harvesting of the 2004 coarse grains has been completed in the main southern producing countries. The subregion’s aggregate output is expected to be about 71 million tonnes, lower than last year’s record harvest of 80 million tonnes, but still above average. In Brazil, 2004 aggregate maize crop production is forecast at about 41.6 million tonnes, about 13 percent less than 2003 record crop. This decline is mainly due to diversion of land to soybeans and rice following more attractive prices and trade opportunities and to the negative impact of dry weather conditions on plantings of the second season crop in Centre-South producing states. In Argentina, latest official forecast indicates a decrease in maize output from 15 million tonnes in 2003 to about 12.7 million tonnes in 2004, due to reduced plantings as a consequence of insufficient rains at sowing. In Chile, Colombia and Uruguay, the 2004 maize outputs are estimated above the average of the past five year’s, reflecting favourable weather conditions.
In North America, continuing favourable weather conditions for the United States maize crop have boosted the country’s prospective coarse grains output to a record high of 299 million tonnes. Crops are maturing in the most southerly producing states where harvest will start soon. In Canada, exceptionally early frosts in late August have raised some concern for the developing crops but it is too early to know the extent of damage, if any, that may have resulted. Up to that point, conditions had been favourable with moisture supplies reported to be the best in several years. Outputs of most small coarse grains are expected to increase but production of maize is set to fall after a significant area reduction.
In Europe, widespread rains in August across north-western parts continued to delay winter grain harvesting, especially in the United Kingdom, but was favourable for the still-developing spring/summer crops. Above-average coarse grain crops are being gathered throughout the EU-25, and the forecast of aggregate output for the group has been raised to 143 million tonnes, much more than the aggregate production of these countries in the previous year. In the Balkan countries, prospects for the coarse grains are also better than a year ago reflecting the significant improvement in moisture availability.
In the European CIS, the coarse grains harvest is in progress and well ahead of the schedule. Aggregate output in the subregion is now forecast at about 52 million tonnes, slightly down from last year’s crop and the second consecutive decline. Late frosts in April, damaged more than 1 million hectares of coarse grains area this spring, reducing earlier production potential, and maize plantings in Ukraine were reduced.
In Australia, the winter coarse grain season is progressing and crops are developing but the outlook is still somewhat uncertain after dry weather again set in some major producing areas. Output is currently expected to slip back from last year’s good level to about 11.5 million tonnes but the final outcome will still depend largely on the amount of rains in the coming few weeks.
FAO’s forecast for global trade in coarse grains in 2004/05 has been reduced by 2.5 million tonnes since the previous report to 102.5 million tonnes, owing to a reduction in the forecasts for maize and barley imports in Europe. At the current forecast level, world imports of coarse grains would be significantly below the previous season’s level. Among the individual coarse grains, trade in maize is likely to be reduced significantly, to around 76 million tonnes, while trade in barley and sorghum may expand slightly, to roughly 16 million tonnes and 6 million tonnes respectively.
Aggregate imports by the developed countries in 2004/05 are forecast at 33 million tonnes, down considerably from 2003/04. In view of large supplies of feed wheat in the EU-25 and the Black Sea region as well as a strong recovery in production, demand for imports, particularly for maize, is expected to be reduced significantly this season. Total coarse grains imports in the developing countries are forecast at 69.5 million tonnes, up nearly 1.5 million tonnes from the previous season. In Africa, higher maize imports by Algeria, Egypt, Malawi, and Uganda are seen to more than offset expected declines in imports by several countries in the southern subregion. Among the countries in Latin America and the Caribbean, imports of sorghum by Mexico and maize by Peru are forecast to increase as a result of reduced domestic supplies and strong feed demand. By contrast, coarse grains imports in Asia are forecast to decline slightly in spite of a likely rise in imports by China and the Islamic Republic of Iran. Reduced demand in Asia also reflects larger availability of feed wheat this season, which could be favoured by some countries in place of maize, as well as a slowdown in the overall economy of several Asian countries and weaker feed use in countries most affected by the recent outbreak of the Avian influenza.
Exportable supplies of coarse grains, maize and barley in particular, are expected to be more abundant compared to the previous season, reflecting a record maize crop in the United States and a strong rebound in production across Europe. Prospects for most traditional exporters as well as several CIS countries to export more coarse grains this season remain favourable in spite of the anticipated decline in world import demand. One reason is that maize exports from China are forecast to drop by one-third, to 4 million tonnes, as a result of its tightening domestic market situation, while exportable maize supplies in Brazil are seen to be reduced due to smaller production. The forecast for exports of barley from the EU-25 has been reduced by 1 million tonnes since the previous report, in view of cheaper supplies from the Black Sea. Elsewhere, the largest exporter in Africa, South Africa, is now expected to maintain the same level of exports as in the previous season, close to 1 million tonnes, in spite of a reduction in domestic production. Sudan is forecast to cut its exports of sorghum as a result of lower production while a bumper maize crop is expected to boost exports from Zambia.
Total coarse grain utilization in 2004/05 is currently forecast at 963 million tonnes, up 1.2 percent from the previous season and above the 10-year trend for the second consecutive season. In spite of large availability of feed wheat, overall feed usage of coarse grains is still expected to demonstrate a modest growth of around 0.6 percent. Most of this expansion, however, is expected in the developed countries, mostly in the United States and Europe, as a result of larger supplies. By contrast, aggregate feed use of coarse grains in the developing countries could decline this season, in part reflecting increases in wheat use while in some Asian countries, generally weaker feed demand is the primary reason. Industrial use of coarse grains, maize in particular, is also likely to increase in 2004/05. High fuel prices and environmental regulations are expected to boost ethanol production in the United States to a new record.
The FAO forecast of world coarse grains stocks for crop years ending in 2005 has been raised 21 million tonnes since the previous report to 145 million tones, almost unchaged from their opening level, after sharp drops in the past four years. The bulk of this month’s upward revision reflects adjustments to the forecasts for closing stocks in the United States, China and the EU. In the United States, closing stocks are now put at nearly 36 million tonnes, compared to 23 million tonnes reported in June. This increase mostly results from a sharp upward revision to the forecast for 2004 maize production. The forecast for stocks in China has been raised to 43 million tonnes, against 36 million tonnes reported in June. The forecast for ending stocks in the EU-25 has been raised by 1.5 million tonnes in view of larger crops and less favourable export prospects, especially for barley.
Based on the latest forecasts, total stocks held by the five major exporters by the end of seasons in 2005 are put at 57 million tonnes, up nearly 7 million tonnes, or 15 percent, from their reduced opening levels. At this level, the global share of world coarse grain stocks held by major exporters would reach 39 percent, up sharply from 34 percent reported in June and much closer to average in the 1990s of around 40 percent.
Improved crop prospects and large feed wheat supplies continue to put downward pressure on international coarse grain prices. Weaker demand for maize imports in Asia, triggered in part by high freight rates as well as reductions in domestic livestock feeding in several Asian countries have contributed to recent declines in prices. Even though sales from China are forecast to be cut sharply this season, improved crops prospects, especially in the United States, is likely to result in much higher overall exportable supplies this season. In August, the export price of US maize (No.2 Yellow) averaged US$104 per tonne, down US$26 per tonne, or 20 percent, since May and only slightly above the price at the same time last year. A similar trend has also characterized the futures market. As a result of better than expected outlook for this year’s crops and slow sales, the Chicago maize futures turned lower in recent weeks and, by late August, December futures were quoted at US$94 per tonne, some US$23 below the December values quoted in late May. In view of the current supply and demand fundamentals, it is more likely that prices will decline further rather than increase in the near term although much still depends on the final outcome of this year’s harvests.