Reference Date: 17-July-2018
Cereal production forecast at above average level in 2018
Total cereal exports in 2018/19 marketing year set below previous year’s record highs
Export and domestic prices of wheat above year-earlier values in June
Cereal production in 2018 forecast at above average level
Harvesting of winter cereals is ongoing. The harvest started two weeks earlier than a year ago amid the dry weather. The sowing of spring wheat (or cereal) crops was completed by mid-June. The planting of spring wheat and barley declined compared to last year, wheat was sown on 12.2 million hectares (13.1 million hectares in 2017), barley on 7.7 million hectares (7.4 million hectares in 2017) and maize on 2.6 million hectares (2.9 million hectares in 2017). According to remote sensing data, conditions of spring crops are below average in most regions of the country.
FAO’s latest forecast of aggregate cereal production has been revised downward since last month due to concerns about dry weather conditions. Total 2018 cereal output (winter plus spring crops) is now set at an average of 111 million tonnes, a 16 percent decline from the record production obtained in 2017.
The decline is mostly due to a reduced production of wheat, which is forecast at 70 million tonnes, about 18 percent less than the 2017 level. Maize and barley outputs are also expected to decline due to the negative impact on yields due to unfavourable weather conditions.
Cereal exports in 2018/19 forecast below record high levels of previous year
Total cereal exports in the 2018/19 marketing year (July/June) are forecast at about 46 million tonnes, almost 14 percent below the record level of 2017/18 but still second highest. Most of the projected decline is due to lower wheat exports, which are expected at 37 million tonnes, about 4 million tonnes below the 2017/18 level amid the reduction in domestic production.
Similarly, barley exports are forecast at 4.4 million tonnes, declining by 25 percent from the record of 2017/18, while maize shipments are set at 4 million tonnes.
Export and domestic prices of wheat above their year-earlier values in June
Export prices of wheat declined by 4 percent from their high values of April 2018, but in June were about 10 percent above their values of a year earlier due to a solid pace of shipments and expectations of a reduction in 2018 wheat harvest.
Domestic prices of wheat increased by 20 percent since the start of the calendar year, supported by concerns over reduced domestic supplies. In June 2018, domestic wholesale prices of milling wheat were 12 percent above their levels of the year earlier.
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