Carryover stocks of grains seen declining
Rising prices of major crops such as corn (maize), wheat and oilseeds, has resulted in tightening supplies and falling inventory. The world therefore needs more grains in 2007 in order to augment supplies and contain prices, acoording to the International Grains Council (IGC).
acreage and area expansion for certain crops. A big increase in production could
result in a recovery of stocks, as occurred in 1996-97, for example. However,
due to strong level of demand, a particularly larger outturn would be required
in 2007 to rebuild inventories of wheat and corn, according to the IGC.
A
notable rise in wheat sowings was already evident in several northern hemisphere
countries; and based on an overall 4% forecast expansion in the world area, the
outlook was for a significant rise in wheat output in 2007, IGC said.
World grain output, especially wheat, had fallen significantly for the
second successive year. In 2006-07, ending stocks would be sharply lower. While
grain demand in some sectors, notably animal feed, would be reduced, industrial
use continued to rise largely as a result of rapidly rising bio-fuel needs for
maize and other grains. While the aggregate closing stocks with the five major
exporters was expected to fall to their lowest level since 1996-97, world trade
in grains in 2006-07 has been forecast to be only modestly higher than in the
previous year. This is despite unusually large milling wheat purchases by India
and Brazil, IGC pointed out.
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