Global Cereal Output & Trade Expected To Reach New Highs

According to the Food and Agriculture Organization's (FAO) report "World Food Situation," global cereal trade is experiencing a "stronger-than-earlier-anticipated" trend, despite the fact that production will likely drop by 6.7 million tonnes (mt) from initial estimates this season (July 2021-June 2022).

While worldwide cereal output and trade are expected to reach new highs this season, stockpiles are expected to fall by more than six million tonnes, according to the UN body's latest report issued last week.

This season's global cereal output has been estimated at 2,793.3 mt, up from early projections of 2,800 mt and 2,771.9 mt last season. Supplies are forecast to rise to 3,618.8 million tonnes (up from 3,620.5 million tonnes earlier this season and 3,579.5 million tonnes last season), with utilization expected to be greater than output at 2,811.6 million tonnes (2,811.4 mt & 2,763.4 mt).

Global Cereals Stocks-To-Use Ratio

Ending stocks are expected to fall to 819.2 mt, while global cereal trade is expected to climb to 478.1 mt (473.2 mt & 476.6 mt) (817.5 mt & 825.4 mt). According to FAO, the 21.5 mt increase in cereal output this season is a new high.

The global cereal stocks-to-use ratio is expected to drop somewhat from 29.4% last season to 28.5 percent this season, albeit it is still high by historical standards. "On weaker harvest predictions," the UN agency added, "the predicted drawdown is largely concentrated among key exporters, in particular Canada, the Russian Federation, and the United States."

Global wheat production is expected to fall to 771 mt, down from 777.2 mt before. It will still be 0.2 mt more than the previous year's output. Wheat output has been reduced by the FAO due to concerns about future crop losses in Iran, Turkey, and the United States.

 Global Wheat Trade Is Expected To Reach Unprecedented Heights

Larger imports are expected for Afghanistan, Iraq, the Islamic Republic of Iran, and Turkey to compensate for lower domestic output, as well as for Egypt to refill reserves, pushing global wheat commerce to a record high of 192 million tonnes.

Increased availability is expected to boost shipments from Argentina, Australia, the European Union, and Ukraine, outweighing expected sales decreases in Canada, Russia, and the United States, where supplies are expected to be tighter than last season.

According to the FAO, total wheat consumption in 2021/22 is predicted to increase by 2.2% to 779 million tonnes, with global wheat consumption growing in sync with population growth, resulting in a relatively steady per capita level.

Despite high wheat prices, feed consumption of wheat is expected to increase significantly this season, particularly in the European Union, China, India, the United Kingdom, and the United States.

Global Rice Production

Despite output being 1.5 mt lower than original predictions, the UN agency predicted that global rice production will reach a new high of 518.2 mt. Due to lesser cultivation in Indonesia and a decline in production in Sri Lanka, the modification was necessary.

This season, global rice consumption is expected to reach a new high of 518.8 mt. Though feed and industrial uses of rice are expected to expand, food consumption is expected to drive majority of the annual worldwide usage expansion, growing at a slightly higher rate than population growth, according to the FAO.

International rice trade is expected to reach 51.3 million tonnes in 2022, with ending inventories expected to reach 187.6 million tonnes, up from 187.1 million tonnes last season. These inventories should be sufficient to cover the predicted increase in global rice consumption, maintaining the global stock-to-use ratio at a manageable 36%.

On better-than-expected yields in Brazil, India, and other West African countries, global coarse grains output has been increased to 1,504.7 mt (1503.6 mt & 1,481.7 mt). Maize production is projected to compensate for losses in barley production, especially in Iran and Turkey, where the crop has been damaged by drought.

Maize Account For The Bulk Of The Utilisation

Maize's higher feed and industrial applications account for the majority of its utilisation, which is estimated to be 1,514 mt. This is due to strong feed demand in Brazil, China, and Canada, as well as increased maize-based ethanol production in Brazil and the United States. Sorghum consumption is expected to rise as a result of rising food and feed demand. Reduced output, on the other hand, is likely to diminish barley's use in feed and industry.

Global coarse grain stockpiles are likely to stay close to where they were at the start of the year. A forecast increase in maize stocks, mostly in China and the United States, is expected to offset a predicted decrease in barley inventories.

Due to forecasts that China and Vietnam would reduce their imports, trade in coarse cereals will likely fall to 234.5 mt (235.1 mt and 238.6 mt). According to the US agency, barley commerce might be affected by decreasing demand from China and Morocco.

Planting Of The 2022 Winter Crops

In the northern hemisphere, planting for the 2022 winter wheat crop has begun, and current strong wheat prices are likely to promote massive sowing. However, increased input prices may limit the spread of wheat-growing land in some nations.

Countries south of the equator are planting coarse grain crops for 2022. In South America, maize output is likely to improve this year from a low point, owing to planned price-driven area expansion and favourable weather projections. Similarly, maize plantings in Argentina are expected to grow, while a strong likelihood of lower rainfall in the coming months could wreak havoc on early crop development.