FAO’s current forecast for world cereal production in 2016 stands at nearly 2 526 million tonnes, virtually unchanged from 2015 and fractionally above the volume predicted in April. The monthly revision resulted almost entirely from improved prospects for wheat production, now anticipated to hover around 717 million tonnes in 2016, that is 4 million tonnes higher than foreseen last month, but still 2.2 percent (16 million tonnes) below the 2015 record. The month-on-month upward revision of global wheat production mainly reflects an improved outlook in Europe, where favourable winter weather bolstered yield expectations in the EU, the Russian Federation and Ukraine. Increases in these countries
more than outweighed an anticipated reduction in India, where the wheat crop has been hit by dry conditions earlier in the season and by heavy rains during the ongoing harvest. At nearly 1 314 million tonnes, the production forecast for global coarse grains in 2016 is almost unchanged from last month, implying a 1 percent (11.2 million tonnes) increase from 2015. Compared to last month, maize production forecasts deteriorated in those Southern African countries suffering from the severe El Niño-induced drought, largely offsetting a slightly improved outlook for maize production in Brazil, where plantings for the second season crop were larger than anticipated. Global rice production in 2016 remains forecast at 495 million tonnes, pointing to a modest 1 percent recovery from 2015. Indeed, although the El Niño is predicted to come to an end in the next few months, coinciding with the bulk of rice plantings in the northern hemisphere, the weather anomaly already caused damage south and along the equator where the season is more advanced.
World cereal utilization in 2016/17 is forecast at 2 549 million tonnes, up marginally from last month and only 1.1 percent (27 million tonnes) above the estimate for 2015/16, marking the second year in succession of below-trend growth. A lower pace of growth in the utilization of cereals as feed is the primary reason behind the slowdown. Total wheat utilization is currently forecast at 724 million tonnes, almost unchanged from the 2015/16 level, with food use expanding by 1.0 percent while feed use is seen contracting by 1.8 percent. World utilization of coarse grains is projected at nearly 1 322 million tonnes, about 1.5 percent higher than in 2015/16. Among the major coarse grains, maize utilization is forecast to increase by 2.4 percent (to 1 026 million tonnes), supported by a 3.0 percent growth in feed. On the other hand, total use of barley is anticipated to drop by 2.7 percent (to 140 million tonnes), largely driven by a 3.4 percent contraction in its feed use. World rice utilization is heading for a 1.5 percent increase in 2016/17, reaching 503 million tonnes, with food use growing by 1.3 percent, sufficient to keep global per capita annual intake stable.
Based on current forecasts for production in 2016 and utilization in 2016/17, world cereal stocks are expected to fall to around 615 million tonnes by the close of crop seasons ending in 2017, down 3.3 percent (21 million tonnes) from the anticipated level in 2016. This month’s forecast is 4 million tonnes higher than FAO’s first projection for 2016/17, published last month, reflecting the more buoyant prospects for global grain production. Despite the year-on-year anticipated decline in world reserves, the ratio of global cereal stock-to-utilization would fall only marginally, from 24.9 percent in the current season to 23.4 percent in 2016/17. Among the major cereals, rice carryovers are expected to end 5 million tonnes lower by 2017, while a more pronounced 8 million tonne drawdown is expected for both wheat and coarse grains. Countries where cereal stocks are forecast to drop by at least one million tonnes include Brazil (-4.7mt), India (-2.4mt), Thailand (-2.8mt), China (-2.3mt) Morocco (-1.9mt), the Islamic Republic of Iran (-1.8mt), Argentina (-1.5mt) and South Africa (-1mt).
The forecast for world trade in cereals in 2016/17 has been raised by 2 million tonnes since last month to 367 million tonnes, driven by upward revisions to wheat and maize volumes. At this new level, global cereals trade in 2016/17 would fall short of the 2015/16 estimate by nearly 7 million tonnes, or 1.8 percent. The year-on-year contraction reflects a sharp fall in world trade of coarse grains, now projected to reach 169 million tonnes, as much as 7 million tonnes (4 percent) less than in 2015/16, following sharply reduced purchases of barley and sorghum by China. At 130 million tonnes, world trade in maize is also expected to decline from the 2015/16 estimate, but only slightly as the sharp anticipated fall in maize imports by the EU would be largely offset by soaring imports by drought-stricken countries in southern Africa. Global wheat trade in 2016/17 (July/June) is currently forecast at 154 million tonnes, up marginally (0.7 percent) from 2015/16, with much of the increase reflecting larger purchases by Morocco, following this year’s production shortfall. Elsewhere, most countries are expected to import quantities similar to those of 2015/16 with some importing even less, most notably the Islamic Republic of Iran. World rice trade in calendar 2017 is preliminarily forecast in the order of 44.0 million tonnes, down slightly from last month’s forecast, and 2 percent less than the current estimate for 2016. Behind the contraction stands an expectation of larger 2016 crops in Asia, which is likely to curb imports in the region, along with shrinking export availabilities in major origins.
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