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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 2019: 7 February, 7 March, 4 April, 9 May, 6 June, 4 July, 5 September, 3 October, 7 November, 5 December.

Tighter cereal supplies in 2019/20 mostly on reduced maize production

Release date: 04/07/2019

The forecast for world cereal production in 2019 stands at 2 685 million tonnes, virtually unchanged from the previous report in June, pointing to 1.2 percent increase from 2018. The bulk of the year-on-year growth is attributed to a higher production of wheat, currently forecast at nearly 771 million tonnes, up 5.6 percent from last year’s level. The latest forecast for global wheat production includes an upward revision in India, where expected exceptional yields are now seen boosting production to a record high. By contrast, at 1 398 million tonnes, FAO’s forecast for world production of coarse grains in 2019 is slightly lower than in 2018, as a reduced global maize output is expected to more than compensate for higher production of barley. Most of the decline in maize production is foreseen to take place in the United States where abnormal wet spring has delayed plantings and is seen to result in lower yields. Diminished crop prospects in China as well as in East and Southern Africa have further dented the overall maize production, more than countering a likely upturn in Argentina. FAO’s forecast of world rice production (milled equivalent) stands at 516 million tonnes, almost unchanged from June and close to last year’s high level. Expected year-on-year output decreases in China, Brazil and United States will likely be offset by expansions in India and Thailand.

World cereal utilization in 2019/20 is forecast up marginally from June, now set to exceed 2 708 million tonnes, 1.0 percent higher than in 2018/19. Total wheat utilization is forecast at 758 million tonnes, 1.5 percent higher than in 2018/19, with most of the anticipated growth in food use. By contrast, the year-on-year growth in total consumption of coarse grains is trimmed further, to only 0.6 percent, following this month’s downward revisions to overall maize utilization in several countries, most notably in Brazil and Mexico. World rice utilization in 2019/20 is pegged at 518 million tonnes, up 1.4 percent from 2018/19, with food intake in Asia and Africa accounting for the bulk of the expected expansion.

The forecast for world cereal stocks by the close of the seasons in 2020 has been lowered slightly since June to 828 million tonnes, now some 27 million tonnes, or 3.2 percent, below the opening level with maize accounting for most of the decrease. Total coarse grain stocks are anticipated to decline by 9.1 percent to 371 million tonnes in 2019/20, of which maize inventories are forecast to drop to around 311 million tonnes, down as much as 12.4 percent (44 million tonnes) from their opening level with most of the reduction concentrated in China and the United States. However, global wheat stocks are set to expand by 4.5 percent (12 million tonnes) in 2019/20, underpinned by expected increases in China, the EU and the Russian Federation. By contrast, FAO has lowered its forecast of global rice stocks in 2019/20 by 400 000 tonnes since the previous report, to 179 million tonnes, reflecting downward adjustments to inventories in the Philippines and the United States. The latest forecast puts total rice stocks at 1.1 percent below their record opening level. Overall, while the stocks-to-use ratio for cereals in 2019/20 is expected to remain at a relatively high level of 29.6 percent, for coarse grains it is forecast to drop to a six-year low of 24.7 percent.

The forecast for world trade in cereals in 2019/20 has been raised slightly since June to 415 million tonnes, now up 2 percent (8.3 million tonnes) from 2018/19. The expected expansion primarily reflects a likely strong rebound in wheat trade, which is forecast to rise by 3.9 percent from the 2018/19 reduced level, in view of the potential for larger exports by Australia, the EU and the Russian Federation. While world trade in coarse grains is likely to remain close to the 2018/19 estimated level, the EU maize imports are forecast to decline sharply year-on-year, on account of large carryovers from the 2018/19 season. Regarding maize exports, this season’s tighter availability in the United States is likely to be largely compensated by ample supplies in South America. World rice trade in 2019 is still expected to contract by as much as 3.1 percent, while FAO’s tentative forecast for rice trade in 2020 points to a rebound, possibly reaching an all-time high level of 48.9 million tonnes.

Please see the July edition of the Crop Prospects and Food Situation report for further details.

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.