World cereal stocks at the close of the individual countries' 2001 marketing seasons are currently put at 647 million tonnes, some 51 million tonnes, or 7 percent, below their already reduced opening levels, but 2 million tonnes more than was reported in April. This month's higher estimates for world cereal stocks reflects larger carryovers in major exporting countries, in view of lower sale prospects than anticipated earlier. As a result, the percentage shares of global stocks of wheat and coarse grains held by the five major exporters, which FAO regards as important indicators of global food security, are now seen to remain stable at around 20 percent and 32 percent, for wheat and coarse grains respectively. Overall, global wheat stocks are now put at 246 million tonnes, down 5 percent from the previous season. Global rice stocks at the close of the marketing season endings in 2001 are forecast to fall by about 8 million tonnes from their opening levels, to 154 million tonnes - an overall change in stocks similar to the previous report. The global contraction in stocks must be viewed with reference to the large build-up that took place in the course of the previous two seasons. China is set to account for the bulk of the expected contraction in global rice inventories, with lesser, but still significant, draw-downs foreseen in India and in Indonesia. The forecast contraction in India is attributed to a reduced 2000 rice crop, while for Indonesia, lower imports for the current year are behind the decline in rice stocks.
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Crop year ending in:
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2000
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2001 estimate
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2002 forecast
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(. . . . million tonnes . . . .)
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Wheat
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258.5
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246.1
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221.5
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Coarse grains
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277.4
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247.3
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241.7
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of which:
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Maize
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227.4
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205.0
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199.1
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Barley
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27.3
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22.5
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23.4
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Sorghum
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8.5
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7.2
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7.0
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Others
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14.3
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12.6
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12.2
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Rice (milled)
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162.0
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153.7
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139.6
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TOTAL
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697.9
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647.1
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602.8
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Source: FAO
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Based mainly on the current production and consumption prospects for 2001/02, early indications for global stocks at the conclusion of countries' crop seasons ending in 2002, point to a significant decline of some 44 million tonnes, or nearly 7 percent, to 603 million tonnes. Considering that the 2001/02 season is set to begin with opening stocks significantly below the previous three seasons, another sharp decrease by the end of 2001/02 seasons could lead to a tighter supply situation in 2002/03, especially in terms of exportable supplies as stocks are also likely to fall in some of the major exporting countries.
As regards the individual cereals, world wheat stocks during the next season could decline by almost 25 million tonnes, or 10 percent, to 221 million tonnes. This would be in part because wheat production in a
number of major wheat producing areas, including the United States and the EC, is forecast to decline. In fact, this could also lead to a drop in the global share of wheat stocks held by major exporters by as much as two percentage points to 18 percent, which would be the lowest since 1997/98. Another important factor, which could also reduce global wheat stocks, is the continuing attempts by China and India, both leading wheat producers, to cut on their large wheat reserves in order to reduce the high financial costs associated.
With regard to coarse grains, the early outlook for next season points to a small decline of about 6 million tonnes in world stocks, to 242 million tonnes. Most of this decline would be on account of further reductions in China. Although the decrease in China's stocks is expected to be less significant than in the past two seasons, mostly because of the anticipated recovery in its 2001 maize production, the Government policy to downsize China's large stocks is likely to continue.
This is seen as the main factor for continuing maize export sales also next season, some of which may even be subsidized; an option, however, which will not be available when China joins the World Trade Organization. Stocks held by major exporters are also likely to decline next season, mostly in view of a possible decline in their total production, as domestic feed use and exports are unlikely to surpass this season's levels.
There is still considerable uncertainty regarding the level of rice stocks at the close of the 2002 season, since they will mainly depend on the outcome of the 2001/02 paddy crops in Asia, most of which have not yet been planted. However, based on current expectations of no growth in global output and rising utilization, a 14 million tonnes draw down in world rice inventories to 140 million tonnes is currently foreseen, the lowest level in the past ten years. China, which is estimated to hold about 70 percent of global stocks, could account for much of the contraction given the expected drop in production this season. Indonesia's efforts to curb the level of imports may also result in lower closing rice inventories in 2002. Other countries may experience a drop in stocks, including Japan, under the recently adopted emergency programme to cut paddy production, increase rice utilization in feeds and external food aid, or India, following some recovery in exports and increases in utilization.
