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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 2014: 06 February, 06 March, 03 April, 08 May, 05 June, 03 July, 11 September, 09 October, 06 November, 04 December.

Prospects for 2014 cereal production improve further

Release date: 03/07/2014

The outlook for global cereal supplies in the 2014/15 marketing season has improved further following an upward revision of the 2014 production forecast since last month. FAO’s latest forecast for world cereal production in 2014 now stands at 2 498 million tonnes (including rice in milled terms), 18 million tonnes up from the previous figure in June, although still 1 percent (23 million tonnes) below last year’s record output. The recent upward revision reflects improved production prospects for coarse grains and wheat crops, particularly in the United States, the EU and India.

For a more detailed analysis of production, see the July issue of the Crop Prospects and Food Situation.

FAO’s forecast for world cereal utilization in 2014/15 has been lowered marginally since June. The major revisions concerned a sharp reduction in industrial and feed use of maize in China, which was largely offset by increases in the United States, EU, Ukraine and Brazil. At 2 462 million tonnes, world cereal consumption is anticipated to grow by 2.1 percent (50 million tonnes) above the 2013/14 level. More than half of the 50 million tonne increase would correspond to coarse grains, the utilization of which is foreseen to rise by 2.1 percent to 1260 million tonnes, underpinned by greater maize usage, both as feed in China and for ethanol in the United States. Consumption of rice is also forecast to register a relatively fast growth of 2.4 percent to 502 million tonnes in 2014/15, while a more modest 1.8 percent gain to 699 million tonnes is predicted for wheat. Overall, the volume of cereals destined for food is projected to progress by 15 million tonnes, or 1.3 percent, compared to 2013/14, resulting in a modest 0.3 percent gain in per caput intake to 153.4 kg per year, of which 67.3 kg corresponding to wheat and 57.6 kg to rice. The expansion in cereal feed utilization is anticipated to be more pronounced than for food, with a forecast expansion of 17 million tonnes, or 2.0 percent, to close to 870 million tonnes. The growth mainly concerns coarse grains, in particular maize, but also wheat in the EU.

The FAO forecast for world cereal stocks by the close of 2015 crop seasons has been raised by 5 percent (28 million tonnes) since last month, to 604 million tonnes. This would represent a 5.3 percent (30 million tonnes) increase from 2013/14 season and the highest level since 2001. Based on the latest stock and utilization forecasts, the global cereal stocks-to-use ratio would reach a 12-year high of 24.3 percent, up from 23.3 percent in 2013/14. Global maize inventories are expected to reach 200 million tonnes in 2015, 31 million tonnes higher than previously anticipated, with much of the revision reflecting upward adjustments following a lowering of maize utilization in China. As a result, world coarse grains carryovers are set to close the season with a 10 percent (23 million tonnes) year-to-year increase to 241 million tonnes. The level of global wheat stocks in 2015 is put at 180 million tonnes, slightly below the June forecast, but 3.5 percent higher than their opening levels. Amid more buoyant production prospects, rice closing inventories were adjusted upwards to 183 million tonnes, 1.3 million tonnes above the level estimated for 2014.

International cereal trade in 2014/15 is currently set at 332.3 million tonnes, nearly unchanged since June, and 4 percent below the 2013/14 record. The decline from 2013/14 reflects a fall in shipments of coarse grains and wheat, as trade in rice is expected to grow slightly. International trade in coarse grains (July/June) in 2014/15 is now forecast at 144 million tonnes, unchanged from last month. Compared to 2013/14, the 6 percent decline in coarse grain trade principally concerns maize, as demand by the EU, which had soared in 2013/14, is anticipated to return to more normal levels. Prospects for trade in wheat in 2014/15 (July/June) also remain at 149 million tonnes: although exports by the Russian Federation and the EU were raised following an upgrading of their production, the changes were offset by a lowering of shipments from India, Kazakhstan and the United States. Based on current expectations, wheat trade would fall by 3.6 percent year-on-year, to 149 million tonnes, reflecting reduced exports by the EU, India, Ukraine and the United States. International trade in rice in calendar 2015 is anticipated to hover around 39.3 million tonnes, 300 000 tonnes more than foreseen last month and slightly above the record expected for 2014. Export prospects in 2015 improved for Pakistan, Thailand and Tanzania, while those by India were downgraded. Indonesia and Malaysia were responsible for much of the revision in the 2015 import forecast. Compared with 2014, exports by Thailand are expected to surge above last year, with sizeable gains also expected for Australia, China, Guyana, Paraguay and the United States. These increases would be mainly at the expense of India, which is projected to cut exports by 15 percent in 2015.

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.