FAO increases global cereals forecast

This is virtually the same as in 2015 and potentially on course to be the 2nd-largest global harvest ever, according to FAO’s Cereal Supply and Demand Brief.

The larger figure results almost entirely from improved prospects for wheat production, as winter weather conditions have been favourable for prospective yields in the European Union, the Russian Federation and Ukraine. At 717 million tonnes, the 2016 wheat output forecast remains 16 million tonnes short of last year’s record.

FAO’s new production forecast for global coarse grains – including barley, maize, millet, oats, rye and sorghum – stands at 1,314 million tonnes, about one percent above the 2015 output. FAO left unchanged its worldwide rice production forecast at 495 million tonnes, about 1% higher than the previous year, although the full impact of the El Niño weather phenomenon will not be clear for a few more months.

World cereal utilisation in the season ahead is expected to rise by only 1.1% due to slower growth in the use of cereals – especially wheat and barley – as livestock feed. As a result, world cereal stocks are likely to drop by 3.3% or 21 million tonnes over the course of the new season. Stocks are forecast to drop most in Brazil, Thailand, India, China, Morocco, the Islamic Republic of Iran, Argentina and South Africa, according to FAO.

World trade in cereals is expected to decline slightly – to 367 million tonnes – with sharp drops in China’s imports of barley and sorghum as well as EU imports of maize, more than offsetting soaring imports of maize by drought-stricken countries in southern Africa.

[Source: FAO]