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 production, utilization, stocks and trade revised up but still forecast to decline from 2021/22

Release date: 08/07/2022

FAO’s forecast for global cereal production in 2022 has been raised by 7 million tonnes in July from the previous month and is now pegged at 2 792 million tonnes, however, still 0.6 percent short of the world output in 2021.

The month-on-month increase predominantly rests on a 6.4-million-tonne upward revision made to the coarse grain production forecast, with the world output seen reaching 1 501 million tonnes in 2022, only 0.5 percent below the 2021 outturn. Prospects were bolstered this month by reports indicating large maize plantings in China (mainland) and India. Furthermore, although still pointing to a likely 30-percent decline from the past five-year average, Ukraine’s maize production prospects were also lifted with official data indicating larger-than-previously anticipated maize sowings. These increases more than outweigh moderate cutbacks to maize production forecasts for Mexico and several Far East Asian countries, as well as a more sizeable cut to the forecast for the European Union, where plantings are lower than originally predicted and drier-than-normal weather has dampened yield prospects. The forecast for world wheat production in 2022 has been lowered only fractionally in July to 770.3 million tonnes, remaining 1.0 percent lower year-on-year. The marginally diminished outlook results from cuts to production forecasts for the European Union, where persisting dryness has impaired yield prospects, and to a lesser degree for Argentina and Iraq. These downgrades more than outweigh improved harvest expectations in Canada and Australia, where conducive weather at planting time and remunerative prices are encouraging area expansions. Additionally, continued beneficial weather in the Russian Federation has lifted yield prospects of the winter crop and further reinforced the country’s good production prospects in 2022. As for rice, FAO has raised its 2022 production forecast for India based on a higher officially reported outcome of the 2021 Kharif harvest in the country. This revision more than compensates for a yield-based reduction made for Viet Nam, alongside some other more minor downgrades. As a result, world rice production in 2022 is now seen in the order of 520.5 million tonnes (milled basis), down just 0.4 percent from the 2021 record harvest.

The forecast for world cereal utilization in 2022/23 has also been lifted, up 9.2 million tonnes to 2 797 million tonnes, but is still 1.7 million tonnes (0.1 percent) below the 2021/22 level, mostly reflecting lower feed use. Following an upward revision of 6.1 million tonnes since the previous forecast in June, utilization of coarse grains is anticipated to remain near the 2021/22 level of 1 504 million tonnes in 2022/23, with a rise in food consumption balancing reduced feed use, especially in North America and the European Union. Despite a 2.0-million-tonne upward revision this month, the forecast for the 2022/23 global wheat utilization is still pointing to a slight (0.3 percent) decline from 2021/22, largely on an anticipated fall in feed use, especially in China and the European Union, as well as in industrial use in India. While China is seen using more coarse grains for animal feed in place of wheat, feed use of wheat in the European Union is expected to decline in line with the overall expected drop in overall feed demand in the bloc. In India, a tighter supply, due to lower production and higher exports, is seen diminishing the country’s industrial use of wheat in 2022/23. Largely mirroring an upward revision to India’s use expectations, FAO has also upgraded its forecast for global rice utilization in 2022/23 by 1.1 million tonnes to a record level of 523.1 million tonnes.

At 854 million tonnes, FAO’s forecast of world cereal stocks at the close of seasons in 2023 is up 7.6 million tonnes from the previous month but still points to a year-on-year contraction of 0.6 percent (5.0 million tonnes). At this level, the global cereal stock-to-use ratio would fall from 30.7 percent in 2021/22 to 29.8 percent in 2022/23. The forecast for global coarse grain inventories has been raised by 6.0 million tonnes from the previous report on higher maize stock expectations, but are still seen heading for a 1.0 percent (3.6 million tonnes) decline below their opening levels, led by a fall in barley stocks. The bulk of the anticipated contraction in barley inventories is concentrated in China, due to higher feed use, and in Australia, stemming from lower production prospects. Following a 7.7-million-tonne upward revision this month, global maize stocks are forecast to remain near their opening levels in 2022/23, with foreseen drawdowns in China and the United States of America, countering build-ups expected in Brazil, following a record production, and Ukraine, where stocks are forecast to reach more than six-times their pre-war level (2020/21 stocks), as a result of war-disrupted exports. The forecast for the 2022/23 global wheat inventories has also been lifted by 1.5 million tonnes since last month, up to 299 million tonnes, now near opening levels. Expected year-on-year expansions of wheat inventories especially in China and the Russian Federation, but also in Canada and Ukraine, are foreseen to offset likely drawdowns in the European Union and India, in particular, as well as in Australia and Morocco. World rice stocks at the close of the 2022/23 marketing year are forecast at 191.7 million tonnes, essentially unchanged from June’s expectations and just 1.0 million tonnes below the 2021/22 all-time high. Much of the forecast year-to-year reduction is anticipated to take place in the Americas, with stocks in other regions, in particular Asia, little changed owing to build-ups expected in China and India.

FAO’s latest forecast for world trade in cereals in 2022/23 stands at 468 million tonnes, up 4.8 million tonnes from last month but representing the lowest level in three seasons and a decrease of 11.4 million tonnes (2.4 percent) from the 2021/22 volume. Accounting for the bulk of the decline, trade in coarse grains is forecast to contract by 4.1 percent (9.5 million tonnes) in 2022/23 (July/June) from the 2021/22 estimated level, largely driven by war-related disruptions of maize and barley exports from Ukraine. Although larger expected maize shipments from Brazil and higher demand from the European Union have boosted global maize trade prospects since the previous report, FAO’s forecast for global maize trade in 2022/23 stands 3.0 percent lower than the 2021/22 level. Increased exports from Brazil in 2022/23 are seen falling short of compensating for smaller shipments expected from the other major maize exporters, including Ukraine, as its main ports remain blocked by the ongoing war, and Argentina and the United States of America, on account of smaller harvests. At 191 million tonnes, world wheat trade in 2022/23 is also forecast to contract by 1.3 percent from 2021/22, largely resulting from a fall in exports from Ukraine and anticipated smaller purchases by several countries in Asia. Ukraine’s reduced export prospects, combined with smaller sales forecasts for Australia and Argentina based on reduced export availabilities, are seen outweighing expected increases in exports from Canada, the European Union and the Russian Federation. International trade in rice in 2022 (January-December) is pegged at 53.4 million tonnes, up 3.7 percent from the 2021 peak and 0.4 million tonnes more than previously anticipated in early June.

More detailed information can be found in the July issue of Crop Prospects and Food Situation.

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.