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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 2015: 05 February, 05 March, 02 April, 07 May, 04 June, 09 July, 10 September, 08 October, 05 November, 03 December.

Ample cereal supplies despite an expected decrease in global production

Release date: 05/11/2015

World cereal production in 2015 is forecast at around 2 530 million tonnes, 4.7 million tonnes less than projected in October and 28.4 million tonnes (1.1 percent) below the 2014 record. Much of this month’s revision reflects a worsening of the outlook for coarse grains, although the forecast for rice was also cut. World coarse grains production in 2015 is now expected to reach 1 302 million tonnes, 4.5 million tonnes less than anticipated in October, and as much as 28.8 million tonnes, or 2.2 percent, below 2014. This month’s revision was mainly the result of less buoyant expectations for maize crops in Asia and Europe. In Asia, the decrease mainly concerned India (reduced by 1 million tonnes), to reflect lower-than-previously anticipated plantings for the kharif maize crop and unfavourable rains. In Europe, dry conditions are behind a 1.6 million tonne reduction of maize production prospects in Ukraine. Similarly, FAO has cut its global rice production forecast by a further 1.6 million tonnes since October, to 491.4 million tonnes, implying a 0.6 percent retrenchment from the already poor 2014 season. This is mainly on account of Thailand, where, following a lingering drought that had already impaired the main crop, insufficient water in the reservoirs is putting at risk the cultivation of the secondary crop. By contrast, the forecast for global wheat production has been increased by 1.4 million tonnes since October to around 736 million tonnes, some 3 million tonnes above the 2014 record. The monthly revision mostly reflects a higher production estimate in the EU, which more than offset lower estimates for Australia and the United States, where insufficient rainfall and high temperatures are hampering yields.

World cereal utilization in 2015/16 is now forecast at 2 528 million tonnes, 1.8 million tonnes less than anticipated in October. At this level, global cereal use would still be 1.2 percent (29 million tonnes) higher than in 2014/15, underpinned by a 1.1 percent and 1.6 percent growth in food and feed usages, respectively. Out of the 1 096 million tonnes of cereals expected to be consumed as food in 2015/16, 491 million tonnes correspond to wheat, 0.9 percent more than the previous season, which would keep annual per caput wheat intake almost unchanged at 67.0 kg. As for rice, 403 million tonnes are currently projected to be consumed as food in 2015/16, 1.5 percent more than the previous season, sufficient to secure an average per caput level of 54.9 kg. Regarding cereal feed use, much of the anticipated growth in 2015/16 would be concentrated in Asia, driven by increases in China, Saudi Arabia and Turkey.

The forecast for world cereal stocks at the close of seasons ending in 2016 has changed little since the previous month, at around 638 million tonnes, as reduced forecasts for maize inventories in India, the Unites States and Ukraine were offset by higher inventories in the EU. Based on the latest forecast for world reserves, the global cereal stock-to-use ratio is expected to reach 24.8 percent, down slightly from the previous season’s ratio.  Among the various cereals, wheat carry-over stocks are projected to rise to 207 million tonnes, up 1.5 million tonnes from last month and the highest in 15 years (since 2001/02). This month’s upward revision mostly reflects a higher forecast for ending stocks in the EU. Rice and maize stocks are anticipated to be drawn down, consistent with the decline in world production foreseen for the two crops in 2015. In the case of rice, much of the contraction concerns the major rice exporting countries, especially India and Thailand. Thus, although the world rice stock-to-use ratio is expected to remain high at 32.4 percent, the major rice exporters’ stock-to-disappearance ratio could dip to 17.4 percent, down from 23.5 percent in 2014/15 and the lowest since 2007/08. World coarse grains inventories are predicted to contract by 1.4 percent over the season, ending at 265 million tonnes in 2016, with much of decline attributed to maize.

The forecast for world cereal trade (exports) in 2015/16 has remained unchanged since last reported at 364 million tonnes, or 11 million tonnes below the 2014/15 record. The year-to-year contraction would be imputable to wheat and coarse grains, as the volume of trade in rice is anticipated to rise by over 1 million tonnes. Wheat trade is now foreseen to fall by 3.7 percent to 150 million tonnes in 2015/16 (July/June), mostly associated with reduced imports by countries in Asia, reflecting good domestic harvests. By contrast deliveries to Brazil, India and the Republic of Korea are set to increase. The rise in India is expected to be contained by the raising of the import duty to 25 percent. Global trade in coarse grains in 2015/16 (July/June) is put at 169 million tonnes, down 3.5 percent from the previous season, mainly reflecting smaller shipments to Asia. By contrast, world rice trade is seen rebounding by 2.7 percent in 2015 (January/December) to 45.2 million tonnes, sustained by a stronger import demand from African countries, but also from Indonesia and the Philippines.

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.