World Food Situation

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 2021: 4 February, 4 March, 8 April, 6 May, 3 June, 8 July, 2 September, 7 October, 4 November, 2 December.

World cereal production and stocks revised down, but overall supplies in 2021/22 remain adequate

Release date: 02/09/2021

Persistent drought conditions in several major producing countries have resulted in a 29.3 million tonne cut to FAO’s 2021 cereal production forecast since the previous report in July, now pegged at 2 788 million tonnes. Notwithstanding this reduction, global cereal production is still projected to grow by 0.7 percent (18.7 million tonnes) relative to the outturn in 2020.

Among the major cereals, the forecast for world wheat production in 2021 has undergone the largest downward revision and is lowered by 15.2 million tonnes since July to 769.5 million tonnes, 0.7 percent (5.7 million tonnes) below the previous year’s outturn. The reduction predominantly reflects the negative impact of prolonged drought conditions on yield prospects in the United States of America (USA), Canada and, to a lesser extent, Kazakhstan, as well as adverse weather in the Russia Federation that increased winter crop losses and lowered yields compared to earlier expectations. These reductions more than offset upward revisions made to production forecasts in Brazil, the European Union and Ukraine, underpinned by continued beneficial weather. At 1 499 million tonnes, FAO’s forecast for global coarse grains production in 2021 has been lowered by 13.7 million tonnes but, in contrast to wheat, remains above the previous year’s level by 1.3 percent (19.5 million tonnes). Approximately half of this month’s downgrade relates to expected maize production in Brazil and the USA, where persistent rainfall shortages have curtailed yield prospects; the output in Brazil is now forecast to decline year-on-year, however, production in the USA is still expected to increase on a yearly basis. Maize production forecasts have been raised for Argentina, the European Union and Ukraine, albeit by smaller amounts than the aforementioned cuts, as continued conducive weather has bolstered yield prospects, while recent field assessments also point to a larger-than-previously estimated maize acreage in Argentina. The forecast for global barley production in 2021 has also been trimmed by 6 million tonnes on lower yield expectations in the USA and Canada. FAO’s forecast of global rice production in 2021 has undergone a 400 000 tonne downward revision since July to 519 million tonnes (milled basis), which is still 0.9 percent (4.8 million tonnes) above the 2020 level and an all-time high. The revision primarily stems from indications of more pronounced area reductions than previously foreseen in Japan and the USA in response to reduced producer margins, as well as in the Islamic Republic of Iran due to shortages of water for irrigation. These downgrades offset an upward revision for Viet Nam, where record-breaking yield results were reported.

World cereal utilization in 2021/22 is forecast at 2 809 million tonnes, down 1.7 million tonnes since July but still up 1.4 percent (40.1 million tonnes) from the 2020/21 level and marking a new record high. The forecast for total wheat utilization has been lowered by 2.2 million tonnes to 777 million tonnes, but is still 2.4 percent (18.5 million tonnes) higher than in 2020/21. Although feed use of wheat has been scaled down this month as supplies tightened and rising wheat prices reduced its competitiveness relative to maize, the expected increase in feed use in 2021/22 remains the main driver of the forecast year-on-year growth in total wheat utilization. The forecast for total utilization of coarse grains in 2021/22 is pegged at a record 1 511 million tonnes, nearly unchanged from the July forecast and up 0.9 percent (13.9 million tonnes) from the 2020/21 estimated level. The growth stems largely from higher projected utilization of maize in 2021/22, especially for feed and industrial uses, and a slight increase in sorghum utilization, while utilization of barley is forecast to decline in 2021/22 on lower feed and industrial uses mostly due to reduced production. World rice utilization in 2021/22 is pegged at 520.5 million tonnes, up 1.5 percent (7.7 million tonnes) from 2020/21 and only little changed from July expectations. Downscaled rice food use prospects for various countries (namely Japan, the Islamic Republic of Iran and Viet Nam) were largely compensated by upgrades to industrial and feed use forecasts (chiefly for Viet Nam).

The forecast for world cereal stocks by the close of the 2022 seasons has been lowered by 27.0 million tonnes since July to 809 million tonnes, and now points to a likely slight decline of 0.9 percent (7.0 million tonnes) below opening levels. The resulting world stocks-to-use ratio for cereals in 2021/22 stands at 28.1 percent, down from the 2020/21 level of 29.0 percent, but still indicating a relatively comfortable supply level from a historical perspective. Following a 12.8 million-tonne reduction this month, world wheat stocks are forecast to fall below their opening levels by 2.0 percent (5.8 million tonnes), to 284 million tonnes. The downward revision and year-on-year drawdown are mostly concentrated in major exporting countries, triggered by reduced production prospects in Canada, the USA, the Russian Federation, and Kazakhstan. With these revisions, wheat ending stocks in the USA are set to reach their lowest levels in eight years while in Canada they are forecast to fall to their lowest levels in over 40 years. The forecast for world coarse grains stocks has also been lowered this month by 14.3 million tonnes to 339 million tonnes, down 0.6 percent (2.0 million tonnes) from their opening levels. Making up the bulk of the downward revision, global maize stocks have been lowered by 10.1 million tonnes, primarily in the USA and Brazil reflecting reduced production prospects, and in Ukraine on larger anticipated exports. As for rice, upward revisions to stock forecasts for traditional rice importing countries (in particular, the Philippines and Japan) compensated for cuts to carry-over forecasts for exporters, such as Thailand. As a result, the size of global rice stocks at the close of 2021/22 seasons still point to its second highest level on record, in the order of 185.1 million tonnes.

FAO’s forecast for world trade in cereals in 2021/22 stands at 466 million tonnes, down 6.2 million tonnes from the July forecast and now 1.3 percent (6.2 million tonnes) below the 2020/21 record level, with expected contractions in wheat and coarse grains trade outweighing a foreseen expansion in global rice trade. At 185 million tonnes, the forecast for world wheat trade in 2021/22 (July/June) has been cut by 4.3 million tonnes since July, and now points to a decline of 1.4 percent (2.7 million tonnes) from the record level in 2020/21. Smaller wheat purchases are forecast by China, Morocco and Pakistan in 2021/22, compared with their imports in 2020/21 owing to higher production and stocks. On the export side, reduced production prospects are seen lowering wheat shipments in 2021/22 from the USA, the Russian Federation and especially Canada, where exports are forecast to potentially fall to a 19-year low. This month’s forecast for world trade in coarse grains stands at 232.3 million tonnes, down 2.3 million tonnes from July. The reduction is led by a cut in global maize trade in view of reduced import demand from the European Union, due to a higher production forecast, and smaller-than-earlier-projected maize exports from Brazil and the USA, as a result of tighter supplies. More subdued import expectations for countries located in the Asian Near East, Europe and Central America and the Caribbean have resulted in a 600 000 tonne downgrade of FAO’s July forecast of global trade in rice in 2021 (January-December) to 47.6 million tonnes. At this level, global rice flows would surpass their 2020 levels by 4.4 percent, with all of the anticipated import growth stemming from the Far East and West Africa.

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.