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FAO revises down global Cereal production forecast
Commodity Online | October 09 2019
UPDATED 10:58:11 IST

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FAO has lowered its forecast for global cereal production in 2019 by 2.2 million tonnes, pegging the world cereal output at 2 706 million tonnes, but still up 53 million tonnes (2.0 percent) from the outturn in 2018.

The latest cut emanates mostly from reduced prospects for global rice and wheat outputs, which outweighed a bigger production forecast for coarse grains.

Global wheat production is pegged at 766 million tonnes, down nearly 1 million tonnes from last month’s forecast, though still a record high. The reduction reflects a cut to Australia’s production forecast on account of continued dryness in eastern regions. This decline more than offset an upward revision to the production estimate for the European Union, where recent field data indicate better than previously anticipated yields.

The latest forecast for global rice production (milled equivalent) is set at 513.5 million tonnes, down 3.8 million tonnes from the previous report and just 0.8 percent below the high output level registered in 2018. India accounts for the bulk of the month-on-month downward revision, as a series of weather setbacks caused planting delays leading to expectations that farmers would plant less than previously anticipated. Production prospects also deteriorated in the United States, where excess rains are now estimated to have triggered more pronounced area cuts than earlier envisaged. Similarly, in the Philippines and China, recent reports indicate a lower area planted in 2019, resulting in a small downgrade of the production forecasts for these countries. By contrast, production outlooks improved in Colombia and Madagascar, where crops have already been harvested and official estimates indicate better than previously anticipated yields.

World coarse grains production is forecast at 1 427 million tonnes in 2019, up 2.5 million tonnes from the previous report issued in September. The more buoyant expectations mostly rest on an improved outlook for global barley production, while the overall positive prospects for the world maize output were further reinforced following a lifting of the production estimate for Brazil, where the major second season harvest is nearing completion. Additionally, the forecast for maize production in the United States has been raised on larger-than-expected plantings; however, an equivalent cut in the forecast for the European Union’s production negated any impact on the global outlook.

World cereal utilization in 2019/20 is now forecast at 2 714 million tonnes, down 1.7 million tonnes from September, but still 34 million tonnes (1.3 percent) higher than in 2018/19 and marking a record high. The forecast for total wheat utilization has been raised by 1.5 million tonnes since the previous report to 761.5 million tonnes, which is also a record exceeding by 2.0 percent the 2018/19 estimated level. At nearly 518 million tonnes, food consumption accounts for most of the total utilization of wheat. However, driven by large supplies and attractive prices, the projected increase in world wheat utilization in 2019/20 is also boosted by an expected 3.6-percent rise in its feed use, which could reach an all-time high of 146 million tonnes.

Total utilization of coarse grains in 2019/20 is forecast at 1 436 million tonnes, down marginally from the September report but still a record high, up 1.0 percent (14 million tonnes) from 2018/19. While the bulk of the year-on-year increase in total utilization of coarse grains is due to stronger demand for maize, especially for industrial use, the forecast for maize feed use in 2019/20 has been trimmed by around 5 million tonnes since the previous report, to just over 648 million tonnes. The revision largely stems from downward adjustments to feed use estimates in China and the EU.

FAO’s new forecast for world rice utilization in 2019/20 is pegged at 516 million tonnes, down 2.3 million tonnes from September due to less buoyant domestic use prospects for Asia. Nonetheless, at this level, global utilization of rice would still exceed the 2018/19 record high by 1.1 percent, driven by expanding food intake.

 

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