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FAO Cereal Supply and Demand Brief

The Cereal Supply and Demand Brief provides an up-to-date perspective of the world cereal market. The monthly brief is supplemented by a detailed assessment of cereal production as well as supply and demand conditions by country/region in the quarterly Crop Prospects and Food Situation. More in-depth analyses of world markets for cereals, as well as other major food commodities, are published biannually in Food Outlook.

Monthly release dates for 2017: 02 February, 02 March, 06 April, 04 May, 08 June, 06 July, 07 September, 05 October, 02 November, 07 December.

Large production keeps global stocks at near-record level

Release date: 08/06/2017

FAO’s latest outlook for global cereal supply and demand in 2017/18 remains favourable as demand is projected to fall slightly short of the anticipated production level, allowing global stocks to remain around their record-high opening levels. 

FAO currently forecasts world cereal production in 2017 at 2 594 million tonnes, 5 million tonnes lower than the May forecast and down 14.1 million tonnes (0.5 percent) year-on-year. The monthly decrease is mostly the result of deteriorating production prospects for coarse grains and, to a lesser extent, for rice.  Compared to 2016, much of the reduction is due to expectations of a 2.2 percent contraction in global wheat output as well as lower barley and sorghum production. These declines would more than offset a 1.4 percent expected expansion in global maize output, driven primarily by strong rebounds in South America and Southern Africa, and a 0.7 percent increase in world rice production.

World cereal utilization in 2017/18 is projected at a record level of 2 584 million tonnes, up 13 million tonnes (0.5 percent) from 2016/17. This forecast stands 11 million tonnes below May expectations, largely reflecting downward adjustments made to historical wheat and maize feed estimates, particularly for China. On an annual basis, total wheat utilization is projected to decline by 0.4 percent from 2016/17, whereas the total uses of coarse grains and rice are expected to grow by 0.8 percent and 1.2 percent, respectively. 

FAO’s May forecast of world cereal stocks by the end of seasons in 2018 has been raised by 14 million tonnes and now stands at 703 million tonnes, up marginally from the 2017 record high. Most of the month-to-month upward revision concerns wheat and maize inventories, with China accounting for much of the adjustment. Overall, the anticipated annual increase in global cereal inventories reflects larger than earlier-expected wheat stocks, while carryovers of coarse grains could very well decline and those of rice would most likely remain largely steady. 

World trade in cereals in 2017/18 is forecast to decline by around 5 million tonnes (1.2 percent) to 391 million tonnes, marking the first contraction in four years. The reduction is largely the result of expectations of weaker import demand for wheat, maize and sorghum.

For more detailed analysis on global markets, see the June issue of Food Outlook. For regional/country analysis, see the June issue of Crop Prospects and Food Situation.

Summary Tables

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1/  Production data refer to the calendar year of the first year shown. Rice production is expressed in milled terms.
2/  Production plus opening stocks.
3/  Trade data refer to exports based on a July/June marketing season for wheat and coarse grains and on a January/December marketing season for rice (second year shown).
4/  May not equal the difference between supply and utilization due to differences in individual country marketing years.
5/ Major wheat exporters are Argentina, Australia, Canada, the EU, Kazakhstan, Russian Federation, Ukraine and the United States; major coarse grain exporters are Argentina, Australia, Brazil, Canada, the EU, Russian Federation, Ukraine and the United States; major rice exporters are India, Pakistan, Thailand, the United States, and Viet Nam. Disappearance is defined as domestic utilization plus exports for any given season.