Record cereal production seen keeping markets adequately supplied in 2021/22

FAO’s forecast for world cereal production in 2021 has been lowered by 2.1 million tonnes since the previous report in November and now stands at 2 791 million tonnes, still 0.7 percent (19.2 million tonnes) higher than the previous year’s outturn and marking a new record. The month-to-month downgrade is primarily the result of an anticipated marginally smaller global coarse grains outturn, reflecting reduced forecasts for barley and sorghum production, which more than offset an upward revision to global maize production on better-than-expected harvests in Ukraine and the United States of America. Nonetheless, pegged at 1 503 million tonnes, the world coarse grains production forecast remains 1.4 percent higher on a yearly basis. As regards wheat, latest reports from Brazil and the United Kingdom of Great Britain and Northern Ireland indicating smaller harvests compared to earlier expectations have resulted in a slightly lower global production forecast, now pegged at 769.6 million tonnes, reinforcing an expected year-on-year decline of 1 percent. As for rice, official assessments in Pakistan indicate that a record crop was harvested this season, overturning previous FAO expectations of a slight drop in output due to water constraints in some provinces. Combined with a yield-based upgrade for the United States of America, this revision compensates for somewhat less buoyant expectations for production in Thailand, owing to September/October floods, and in Bangladesh, due to a slightly lower than previously envisaged main-crop yields. As a result, global rice production in 2021 is still seen around 518 million tonnes (milled basis), up 0.9 percent year-on-year and a fresh peak.

Sowing of the 2022 winter wheat crop is nearing completion in northern hemisphere countries, under generally good weather conditions. In the European Union, crop conditions are good, particularly following rains in eastern countries that have alleviated earlier concerns over soil moisture deficits, and wheat planted area is expected to remain on par with last year; however, strong competition from rapeseed could spur a small contraction. In the United States of America, the planting pace of the 2022 winter wheat crop has been close to average, and early indications point to a 5-percent increase in total wheat plantings, with firm prices underlying the foreseen expansion. In the Russian Federation and Ukraine, wheat sown areas are estimated above their respective five-year averages, though a lack of adequate soil moisture has affected plantings. In the Near East, rainfall deficits early in the season have impaired production outlooks in several countries, while in Far East Asia, including India, production prospects are supported by remunerative prices and government support programmes.

In southern hemisphere countries, planting of the 2022 coarse grain crops is underway. In South America, the maize areas in Argentina and Brazil are officially forecast at record highs, driven by strong domestic prices, while generally favourable weather outlooks are also bolstering production prospects. In South Africa, planted area to maize is expected to remain at an above-average level as farmers have been encouraged by firm prices and a positive weather outlook, nevertheless a small year-to-year cutback is foreseen.

Despite this month’s 2.0-million-tonne downward revision, world cereal utilization in 2021/22 is forecast to rise by 1.7 percent above the 2020/21 level, reaching 2 810 million tonnes. The wheat utilization forecast has been lowered by 1.8 million tonnes since November, to 779 million tonnes, mostly reflecting lower feed use expectations in the European Union where price movements are seen displacing wheat for greater use of other feed grains, including maize. Nonetheless, global wheat utilization is still expected to increase by 2.0 percent from the 2020/21 level on robust food consumption and feed demand. At 1 514 million tonnes, the forecast for total utilization of coarse grains is nearly unchanged from last month with higher-than-previously-expected industrial use of maize, largely due to a faster rise in ethanol production in the United States of America, offsetting lower feed use estimates for barley owing to tighter supplies and high prices. World total utilization of coarse grains in 2021/22 is forecast to expand by 1.6 percent from the 2020/21 level, supported by higher use of maize for feed, especially in Brazil, China and the United States of America, and for ethanol production in Brazil and the United States of America, as economic activity continues to pick up and oil prices remain firm. Abundant supplies are still expected to sustain a 1.6 percent annual expansion in global rice utilization in 2021/22 to an all-time high of 519 million tonnes.

The forecast for world cereal stocks by the close of seasons in 2022 stands at 822 million tonnes, up 2.9 million tonnes since November but still down 0.7 percent from opening levels. Based on the current forecasts for ending stocks and utilization, the world cereals stocks-to-use ratio in 2021/22 will likely decline slightly, from 29.4 percent in 2020/21 to 28.6 percent in 2021/22, but would still indicate a comfortable supply situation overall. Upward revisions for wheat stocks in the European Union and Turkey, stemming from lower foreseen domestic utilization, the Russian Federation, on account of reduced export expectations, and the United Kingdom of Great Britain and Northern Ireland, on higher anticipated imports, helped push up the world wheat stocks forecast by 2.6 million tonnes. However, despite this month’s upward revision, world wheat inventories are still predicted to decline by 1.7 percent below their opening levels, led by anticipated drawdowns in Canada, the Russian Federation, and the United States of America following reduced harvests. The global coarse grains stocks forecast remains close to 350 million tonnes, still pointing to a slight fall of 0.4 percent from opening levels, reflecting contractions in global inventories of barley, sorghum, and other coarse grains. By contrast, global maize stocks are set to rise above opening levels for the first time in four seasons, mostly on expectations of higher inventories in China and a partial recovery in the United States of America. The latest FAO forecast of rice stocks at the close of the 2021/22 marketing seasons has undergone only minor adjustments since November and is still seen hovering around a record 188 million tonnes. Continued accumulations in the five major rice exporters are expected to underpin lifting the group’s aggregate level of inventories over the 50-million-tonne mark and keeping their stock-to-disappearance ratio largely stable at 26.8 percent.

FAO’s forecast for global trade in cereals in 2021/22 has been lifted by 2.2 million tonnes since November to a record 480 million tonnes, 0.7 percent higher than in 2020/21. World wheat trade in 2021/22 (July/June) is now seen to expand from last year’s level by 2.2 percent, driven by robust demand, especially from the Near East to compensate for reduced domestic harvests. On the supply side, expected larger sales by Argentina, Australia, the European Union and Ukraine, benefitting from ample exportable surpluses following good harvests, outweighed foreseen reductions in shipments from Canada, the United States of America and the Russian Federation, where sales are likely to be limited by a rising export tariff. FAO’s forecast for global trade in coarse grains still points to a likely contraction of 1.3 percent in 2021/22 (July/June) from its record level in 2020/21, underpinned by a foreseen fall in maize and barley trade, despite a 1.1-million-tonne upward revision this month. The bulk of this revision rests on higher anticipated barley purchases by Turkey incentivized by reduced production and expectations for barley to replace wheat and maize in feed rations. World rice trade in 2022 (January-December) is predicted to reach 51.4 million tonnes, up 4.9 percent from the expected level for 2021.

More detailed information can be found in the December 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.

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