|No. 4||Rome, December 2004|
Coarse grains production
Source: FAO. Note: Totals computed from unrounded data.
FAO’s forecast for world coarse grain output has been raised significantly again since the previous report, to 1 013 million tonnes, 8.5 percent up from last year and by far the largest output on record. Further upward revisions for the United States contributed a large part to the latest increase but also, better-than-expected yields became evident in China, several European countries and Mexico as their harvests progressed in the past two months.
In Far East Asia, the 2004 aggregate coarse grains production is forecast higher than last year’s good level. In China, harvesting of the main crops is complete and yields turned out to be better than earlier expected. The country’s aggregate coarse grains crop is now estimated at 141 million tonnes, 11.6 percent up from the previous year reflecting increased plantings and favourable weather. Harvesting is underway in India, where a prolonged dry spell in western and northern parts of the country has limited crop potential. Aggregate output in 2004 is forecast at 33.5 million tonnes, which would be 3.5 percent down from last year. A good crop was harvested in the Philippines, well up from the 2003 output and planting of the crops for harvest in the spring 2005 is underway. In the Asian CIS subregion, the 2004 aggregate coarse grains production is estimated at 3.7 million tonnes, down by about 17 percent from 2003 reflecting the effect of adverse weather in Kazakhstan, the main producer.
In North Africa, good coarse grains outputs similar to last year’s levels have been harvested reflecting favourable weather. Planting of winter grains for harvest next year is underway but there is considerable concern for the outcome because swarms of Desert Locust that escaped control operations in the Sahel are moving northwards and invading most countries, notably Morocco and Algeria.
In western Africa, the 2004 production season in the Sahel has been overshadowed by uncertainty because of serious infestations of Desert Locust. Preliminary findings of a series of FAO/CILSS (jointly with WFP in some countries) crop assessment missions indicate that aggregate output of the subregion is expected to be close to the five-year average, although some countries have been severely affected. In Mauritania, the worst hit country, cereal production is expected to decrease by over 40 percent, due to drought and widespread locusts infestations. In Cape Verde, this year’s maize production is forecast to be only one-third of last year’s output. Severe crop losses occurred also in localized areas in the northern part of Burkina-Faso, Chad, Mali, Niger and Senegal. In the southern parts of the countries along the Gulf of Guinea, an average maize crop has been gathered while growing conditions have been favourable for the second maize crop to be harvested from December. In the north, satisfactory millet and sorghum crops were harvested.
In central Africa, growing conditions are favourable for the second maize crop to be harvested from December in Cameroon, where a satisfactory first maize crop was harvested. In Central African Republic, despite good weather conditions and distribution of seeds to assist farmers, production is not expected to recover significantly due to persistent insecurity.
In eastern African, harvesting of the 2004 main season coarse grains has been completed in southern parts of the subregion but has just started in northern countries. The subregion's 2004 output, compared to the previous year, is forecast to decline in almost all countries except in Tanzania. The overall production is estimated at about 19 million tonnes, 14 percent below last year’s good level. In Somalia, the 2004 main season “Gu” crop, is estimated at 125 000 tonnes, about 25 percent below the post-war average. In Uganda, recent reports indicate a below average 2004 output due to erratic rainfall. In Kenya, preliminary estimates for the “long rains” maize crop were revised downward from 2 million tonnes to about 1.7 million tonnes, well below the average of the previous five years. In Ethiopia, the coarse grain crop is expected to be below last year’s good crop due to erratic rainfall in some major producing areas. In Eritrea, production is anticipated to be similar to last year’s reduced crop. In the Sudan, early indications suggest a well-below average crop due to poor distribution of rainfall. By contrast, in Tanzania, the 2004 coarse grains output is estimated at about 4 million tonnes, 19 percent above last year’s crop.
In southern Africa, the 2004 coarse grains season, completed earlier in the year, was characterized by unfavourable weather in several countries, including South Africa, the subregion’s largest producer. Aggregate output is estimated at 16.4 million tonnes, almost 4 percent below the previous year’s average crop. Maize, the major staple, was estimated at 14.9 million tonnes. However, harvests in Angola, Mozambique and Zambia were satisfactory.
In Central America and the Caribbean, harvesting of 2004 second season coarse grain crops is about to start. In Guatemala and Honduras, dry spells and irregular rains in some parts during September have adversely affected the production outlook. In Mexico, the main 2004 summer maize crop is officially forecast at about 2 percent above the same season’s output last year. The 2004 aggregate production is forecast at a record 20 million tonnes, mainly reflecting favourable weather conditions and increased plantings in response to government support to white maize producers in the key producing state of Sinaloa. Planting of the 2004/05 winter maize crop just started in north-west Mexico and the area sown is expected to be similar to 1.1 million hectares planted in winter 2003/04.
In South America, the 2004 aggregate coarse grains production declined by 10 percent due to lower plantings and yields. Planting of main season maize crop to be harvested from February 2005 is well advanced in southern producing countries. Early prospects are mixed. In Argentina, official planting intentions point to an area of 3.2 million hectares, about 12 percent higher than previous year. In key producing states of centre-south Brazil, the area planted is estimated at 9.3 million hectares, a decline of 2 percent compared to last year mostly due to diversion of land to more profitable soybeans in the state of Parana. In Chile, official sources estimate 2004/05 maize planted area at 130 000 hectares, with an increase of 9.4 percent compared to previous year in order to meet the growing demand of the national feed industry.
In North America, conditions remained very favourable for the completion of the United States maize harvest over the past two months and record yields of maize and other crops boosted the aggregate 2004 coarse grains output to an all time high of 319 million tonnes. In Canada, this year’s harvest was disrupted by adverse weather: excessive rains delayed the start of harvesting and early frosts and snow brought a premature end in some parts meaning some crops may not be harvested at all this year. Because of uncertainty over the final area harvested, the estimate of aggregate coarse grains output remains tentative at 25.7 million tonnes, down 3 percent from 2003.
In Europe, the bulk of the 2004 coarse grains have been harvested and the winter coarse grains for harvesting in 2005 have mostly been planted under favourable conditions. In the EU-25 the 2004 aggregate coarse grains output has been raised by 8 million tonnes since September to 151 million tonnes. As the harvest progressed, it became evident that timely summer rains had boosted the summer grain (mostly maize) yields in several countries. At this level, aggregate output in 2004 would be some 20 percent above that in 2003. In the Balkan countries, coarse grains outputs were also much better than a year ago, reflecting the significant improvement in moisture availability during the 2004 season, especially for the summer maize crops. Most notably, output in Romania is estimated to have increased by almost 60 percent to some 15 million tonnes. In the European CIS, where maize is a less important component of the total annual production, the increase in 2004 output was less pronounced. Aggregate coarse grains output in the Russian Federation actually fell slightly but a significant improvement in barley output in the Ukraine contributed to take the subregion’s aggregate coarse grains output to 54.8 million tonnes, 2.6 million tonnes up from 2003.
In Australia, the 2004 winter grain harvest is underway. Output of winter coarse grains (mainly barley) is set to slip back this year to about 10.2 million tonnes, reflecting some reduction in area but also poorer yields expected after adverse dry conditions during the latter part of the growing season.
The prospects for trade in coarse grains in 2004/05 have changed little since the previous report in September. At 102.5 million tonnes, world trade in coarse grains in 2004/05 would be significantly smaller than in the previous season. For the developing countries as a group, total coarse grains imports are forecast at 69 million tonnes, up 1.4 million tonnes from 2003/04, whereas, aggregate imports by the developed countries are put at 33 million tonnes, sharply below the previous season’s level, mostly the result of reduced imports by the EU1/ . Among the individual coarse grains, trade in maize is likely to be most affected, down to 76.5 million tonnes, while trade in barley may expand slightly, to roughly 16 million tonnes. For other coarse grains, trade is expected to remain steady at the previous season’s levels.
In Asia, lower maize imports by Japan, Israel, Indonesia, and the Republic of Korea are likely to more than offset larger purchases of maize by the Islamic Republic of Iran, and of barley by Saudi Arabia and China. This season’s large supplies of feed wheat are seen to give rise to higher imports of Black Sea origin feed wheat and a decline in maize purchases by several countries in Asia. In Indonesia, feed demand has weakened as a result of an avian flu outbreak. This has resulted in an increase in exports and also the Government recently announced plans to put tariffs on maize imports in an effort to support domestic production. In Japan, maize imports are likely to decline as a result of reduced feed demand. In Africa, it is in Kenya that imports are likely to increase fastest, up 600 000 tonnes from the previous season because of a sharp reduction in maize production as a result of drought. Among the countries in Latin America and the Caribbean, Mexico and Peru are forecast to raise their imports slightly this season, mostly in response to strong domestic feed demand.
On the export side, this year’s record maize crop in the United States and a sharp upturn in barley production in the EU as well as in Ukraine would mean much larger exportable supplies than in 2003/04. In addition, in Asia, China is expected to harvest a near-record maize crop, which, in view of very high ocean freight rates would encourage exports to neighbouring countries. However exports by China are likely to remain well below the previous season’s due to smaller stocks and higher internal prices. Thailand is also seen to export more maize this season as a result of weaker domestic feed demand triggered by an outbreak of avian flu and the extension of the poultry import ban by the EU and Japan. Elsewhere, exportable maize supplies in Brazil are seen to be reduced because of smaller production. However, Brazil is expected to remain a strong player in the maize market due to very large carryover stocks. In Africa, South Africa is expected to cut its exports to 900 000 tonnes (July/June), from 1.2 million tonnes in 2003/04, as a result of reduced maize production. However, larger maize exports are expected from Zambia and Tanzania due to anticipated increase in their domestic outputs.
The forecast for global utilization of coarse grains in 2004/05 has been raised significantly since the previous report, following the sharp upward revision of the world coarse grain production estimate. Total coarse grain utilization in 2004/05 is now put 977 million tonnes, up 14 million tonnes from the September forecast and 3 percent above the estimated utilization in 2003/04. Driven by a record maize crop this year, total utilization in the United States is expected to rise by almost 14 million tonnes, of which feed use is forecast to increase by 8 million tonnes. The continuation of rapid growth in maize-based ethanol production in the United States, supported by environmental regulations and high fuel prices, would also keep demand for industrial use of maize strong in 2004/05. In the EU, bumper maize and barley crops will also result in a sharp increase in its total feed use of coarse grains this season. Also in China, this year’s anticipated strong recovery in maize production is expected to give rise to higher feed usage.
FAO’s forecast for world coarse grains stocks for crop years ending in 2005 has been raised again as a result of the latest upward revision to the production estimates. World stocks of coarse grains are now forecast at 181 million tonnes, up 35 million tonnes from the previous report and 33 million tonnes, or 23 percent, more than the revised estimate of their opening levels. Record production in the United States, bumper crops in Europe and a sharp upturn in China’s output are among the main reasons for the anticipated recovery in world coarse grains inventories. Based on the latest forecasts, total stocks held by the five major exporters by the end of seasons in 2005 are put at 79 million tonnes, up almost 60 percent, from their reduced opening levels. At this level, the global share of world coarse grain stocks held by major exporters would reach 44 percent, up sharply from the previous year and well above the historical average of around 40 percent. In the United States, ending stocks are projected at 51 million tonnes, up 22 million tonnes from their opening levels. In the EU, ending stocks are put at nearly 22 million tonnes (10 million tonnes barley, 5 million tonnes maize, and 4 million tonnes rye). The recovery in this year’s production across the EU, especially a bumper maize crop in Hungary, coupled with weak export prospects are also expected to result in a significant increase in the size of intervention stocks of all major coarse grains, except for rye, which is not supported by the current intervention system. Higher stocks forecast in China would also contribute to the expected buildup in global reserves. After four years of consecutives drawdowns, China’s stocks (mostly maize) are forecast to increase to nearly 51 million tonnes, up 3 million tonnes from the previous season.
As a result of this season’s favourable crop prospects, an increase in exportable supplies among the major exporters and large feed wheat availabilities, international prices remain mostly below the previous year’s levels. Weaker Asian demand driven by lower domestic livestock feeding has also contributed to the decline in prices in recent months. In November, the price of US maize (US No.2 Yellow) averaged US$94 per tonne, down US$10 since August and US$13 from the corresponding month last year. Also in the US futures market, in spite of continued weakness in the US dollar, especially against the Euro, the Chicago maize futures slipped further and by end-November, March 2005 futures were quoted at US$80 per tonne, some US$18 below the March 2004 values quoted in November 2003. Soaring ocean freight rates have also dampened demand and hence affected export prices. However, the main contributing factor driving down prices in world markets this season is mostly the expected large surpluses in the United States and in Europe.
1. The EU imports show a decline from the previous season also because of the EU enlargement. The impacts of the EU enlargement on trade numbers were discussed in June 2004 issue of Food Outlook.