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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 2016: 04 February, 03 March, 07 April, 05 May, 02 June, 07 July, 08 September, 06 October, 10 November, 08 December.

Global cereal supply prospects for 2016/17 improve further

Release date: 02/06/2016

World cereal production in 2016 is anticipated to fall slightly short of projected demand in 2016/17, which would bring global end-of-season inventories in 2017 somewhat below their near record 2016 level.  Supply prospects improved in recent months, on larger than earlier projected stocks at the beginning of the 2016/17 marketing season and more buoyant expectations about 2016 production.

FAO forecasts world cereal production in 2016 at around 2 543 million tonnes, 0.6 percent higher than in 2015 and only 0.7 percent below the 2014 record high. At that level, production would be 17.3 million tonnes larger than was expected in May, reflecting upward revisions for wheat production in Argentina, the EU and the Russian Federation, as well as for maize in Argentina, Canada, the EU and the United States. Compared to 2015, world wheat production is likely to decline, while rice and coarse grains outputs are forecast to increase.

World cereal utilization in 2016/17 is currently put at nearly 2 546 million tonnes, or 0.9 percent above the 2015/16 estimate. The forecast is 3.5 million tonnes lower than reported in May, because global feed use of wheat was revised down. Total utilization of wheat is now foreseen to even decline by 0.1 percent in 2016/17.

The forecast for global cereal stocks by the end of seasons in 2017 has been lifted by 27 million tonnes since May and now stands at nearly 642 million tonnes. Higher forecasts for production, lower for utilization and historical revisions to China’s wheat inventory estimates are the main reasons for this month’s adjustment. At their newly predicted level, world stocks would be barely 1.8 million tonnes below their all-time high opening level. 

At 369 million tonnes, global trade in cereals in 2016/17 is predicted to decline by 1.9 percent compared to 2015/16, mostly due to reduced import demand for barley and sorghum. The overall contraction in world cereal trade is likely to intensify competition for market share among major exporters, a prospect that could keep international prices in check.

For more detailed analysis see the June issue of Food Outlook, released on 2 June.

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.