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 2022: 3 February, 4 March, 8 April, 6 May, 3 June, 8 July, 2 September, 7 October, 4 November, 2 December.

Global cereal stocks seen rising but trade expected to decline from the 2020/21 record

Release date: 06/05/2022

With almost all crops harvested, FAO’s world cereal production forecast for 2021 has remained unchanged this month at 2 799 million tonnes, 0.8 percent above the outturn in 2020. Pegged at 1 502 million tonnes, global coarse grain production in 2021 is 18.9 million tonnes higher on a yearly basis, almost entirely underpinned by a larger maize outturn that more than offset a sizeable decrease in world barely production. Global wheat output is pegged at 777 million tonnes, virtually on par with the crop produced in 2020. As for rice, consistent with the generally conducive weather conditions prevailing over the season, somewhat higher reported yield outcomes raised production expectations for Bangladesh, the Philippines and Cote d’Ivoire, while, in the case of Mali, a slight upward revision to output followed official indications of the area under paddy having registered a less pronounced contraction than previously reported. Put together, these changes raised FAO’s forecast for world rice production by a small margin of 0.4 million tonnes to 520.8 million tonnes (milled basis), which represents a 0.7 percent increase from the 2020 harvest and a new record high.

At 2 785 million tonnes, the forecast for the 2021/22 world cereal utilization has been revised down slightly since the previous month, but it still represents a 0.9 percent expansion from 2020/21. Despite a 5.2 million-tonne downward revision this month, mostly reflecting lower feed use estimates in India, global wheat utilization is forecast to rise by 0.7 percent in 2021/22, mainly driven by higher food consumption foreseen in Asia and Africa. FAO’s forecast for total utilization of coarse grains is nearly unchanged this month, pointing to a 2.0 percent increase in 2021/22 from the previous year, largely due to an expected increased use of maize for feed, especially in Brazil, Canada and China, as well as for ethanol production in the United States of America. Offsetting some of that increase, barley utilization is seen falling in 2021/22 mostly in Canada, the European Union and the United Kingdom of Great Britain and Northern Ireland on account of reduced harvests, as well as in Saudi Arabia as a result of lower imports compared with last season. Rice utilization remains forecast to grow by 1.8 percent in 2021/22 to a fresh peak of 520.7 million tonnes. The increase is anticipated to be underpinned by a 1.6 annual foreseen expansion in food intake to 424.6 million tonnes, as well as an 11.9 percent rise in animal feed use to 22.3 million tonnes.

FAO’s forecast for world cereal stocks by the close of seasons in 2022 stands at 856 million tonnes, up 5.2 million tonnes since the previous forecast and pointing to an increase of 2.8 percent above opening levels. Based on this month’s forecasts for stocks and utilization, the global cereal stocks-to-use ratio is forecast to remain unchanged from 2020/21 at 29.9 percent, indicating a relatively comfortable supply level. Following an 8.7-million-tonne upward revision this month, mostly attributed to adjustments to India’s inventories based on official estimates, global wheat stocks are forecast to rise by 4.2 percent above opening levels. Notwithstanding a 3.5-million-tonne downward revision this month, world coarse grain stocks are also expected to rise above opening levels, by 2.4 percent. However, the large majority of that increase stems from a 5.5 percent expected rise in global maize stocks, underpinned by a build-up of inventories in Ukraine as a result of suspended exports, while global barley stocks are expected to contract by 12.0 percent. Following only minor adjustments to carryout forecasts for a few countries, world rice stocks at the close of 2021/22 marketing seasons are now pegged at 192.7 million tonnes. This level would imply a 1.2 percent year-to-year expansion, as anticipated drawdowns in China and, to a lesser extent, Indonesia, the Islamic Republic of Iran and the United States of America are foreseen to be more than offset by accumulations expected elsewhere, especially in Bangladesh, India and Viet Nam.

World trade in cereals in 2021/22 is forecast to amount to 473 million tonnes, up 3.7 million tonnes from last month’s forecast but 1.2 percent below the 2020/21 record level. Following a 1.2 million tonne upward revision since the previous month, the forecast for global wheat trade in 2021/22 (July/June) is now pegged at 191 million tonnes, 1.0 percent above the 2020/21 level. While blocked ports continued to hinder wheat exports from Ukraine, this month’s upward revision mainly reflects higher-than-expected exports from the Russian Federation based on continued shipments in April, mostly to Egypt, the Islamic Republic of Iran and Turkey, despite freight and financial difficulties for sales. FAO’s forecast for global trade in coarse grains in 2021/22 (July/June) has also been lifted by 2.4 million tonnes, almost exclusively on expectations of higher maize trade. Continued strong maize demand from China, as well as a stronger-than-expected pace of shipments from Argentina in recent months, are behind the bulk of this month’s 1.7-million-tonne upward revision to global maize trade. Additionally, efforts in Ukraine to move maize via railway to its European borders for export, albeit with many logistical challenges, have resulted in a small (0.5 million tonnes) upward revision for Ukraine’s export forecast compared to last month. However, global coarse grains trade in 2021/22 is still forecast to decline by 4.1 percent from 2020/21, largely attributed to a foreseen 5.7 percent fall in maize trade from the 2020/21 record level.  FAO’s forecast for international trade in rice in 2022 (January-December) continues to point to a 3.8 percent expansion from 2021 to a peak of 53.4 million tonnes.

Production outlook for 2022 crops

The forecast for world wheat production in 2022 has been scaled back moderately since the previous month, but standing at 782 million tonnes, FAO still predicts global wheat production to grow this year. The month-to-month reduction mostly concerns the United States of America, where persisting drought conditions have impaired yield prospects of the winter wheat crop and curbed overall production expectations. However, underpinned by a price-driven expansion in planted area, the country’s total wheat output is still foreseen to increase to 50 million tonnes in 2022, about 5 million tonnes (11 percent) above the previous year’s output. With the main spring crop about to be sown in Canada, a substantial production recovery is foreseen following the drought-reduced harvest in 2021. In Europe, the forecast for wheat production in Ukraine remains unchanged and at a below-average level, reflecting the effects of the conflict that are foreseen to reduce the harvested area by at least 20 percent. Yields are also expected to decline in 2022 due to conflict-related disruptions to agricultural operations prior to the harvest period. The outlook in the Russian Federation remains broadly favourable, as conducive weather conditions continue to point to an upturn in yields that underlie the forecasted production increase in 2022. In the European Union, the forecast for wheat production has been raised to 139.5 million tonnes this month on account of recent official data indicating a small year-to-year increase in wheat sowings, compared to earlier expectations. However, reflecting persistent dryness in southern areas, an anticipated decline in yields in 2022 is expected to offset the effects of the larger plantings, keeping the output unchanged on a yearly basis. In Asia, small production increases are forecast for India and Pakistan in 2022, while in the Near East countries, wheat outputs are forecast at average levels, supported by generally favourable weather. However, in North Africa, the effects of drought conditions, which are particularly acute in Morocco, are foreseen to result in sizeable production declines.

Regarding coarse grains, harvesting of the 2022 crops has started in the southern hemisphere, and prospects continue to point to above-average outputs in leading producer countries. In South America, official data affirm expectations that Brazil will harvest a record maize crop in 2022, forecast at 116 million tonnes, driven by record-high plantings. Despite some lingering concerns regarding dryness in parts of the country that have curtailed yield prospects, favourable crop conditions prevail in the main producing state, Mato Grosso. In Argentina, dry weather conditions are likely to reduce yields and result in a moderate cutback in production to about 57 million tonnes; however, the harvest is still anticipated at an above-average level. In Southern Africa, despite the impact of floods in eastern parts of South Africa, the leading producer and exporter in the region, maize production is still pegged at an above-average level of 15.3 million tonnes in 2022. Elsewhere in Southern Africa, rainfall shortages and the effects of tropical cyclones are foreseen to result in output reductions in 2022, with some countries anticipated to gather below-average harvests. In the northern hemisphere, planting of the 2022 maize crop has recently begun. In the largest global producer, the United States of America, initial planting surveys indicate that the maize acreage is likely to decline by 4 percent in 2022, amid concerns about the high costs of inputs.

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.