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Global cereal trade, especially in wheat and rice, is witnessing “stronger-than-earlier-anticipated” trend, even as production will likely drop by 6.7 million Tonnes (MT) from initial estimates this season (July 2021-June 2022), according to the Food and Agriculture Organization (FAO) report “World Food Situation”.

While global cereal production and trade are set for a record high this season, inventories are likely to contract by over six MT, the UN body said in its latest report released last week.

earlier estimates of 2,800 MT and 2,771.9 MT last season. Supplies are projected to increase to 3,618.8 MT (earlier 3,620.5 MT earlier and 3,579.5 MT last season), while utilization is expected to be higher than production at 2,811.6 MT (2,811.4 MT & 2,763.4 MT).

Stock-to-use ratio

Global cereals trade is anticipated to rise to 478.1 MT (473.2 MT & 476.6 MT), ending stocks are projected to drop to 819.2 MT (817.5 MT & 825.4 MT). The 21.5 MT rise in cereals production this season marks a new record, FAO said.

Global cereals stocks-to-use ratio is forecast to decline a tad from 29.4 per cent last season to 28.5 per cent this season, though it is still relatively high from a historical perspective. “The forecast drawdown is mostly concentrated among major exporters, in particular Canada, the Russian Federation and US on lower harvest prospects,” the UN agency said.

Foodgrain output scales a new peak in 2020-21 season

Among cereals, global wheat production is forecast to drop to 771 MT against 777.2 MT earlier. It will still be 0.2 MT higher than last year’s production. FAO said wheat output has been pruned on fears over further loss of the crop in Iran, Turkey and the US.

Wheat trade at new high

World wheat trade is now forecast to expand to a new level of 192 million tonnes, underpinned by larger imports anticipated for Afghanistan, Iraq, the Islamic Republic of Iran, and Turkey to compensate for reduced domestic production, as well as for Egypt to replenish stocks.

Among exporters, increased availability is seen boosting shipments from Argentina, Australia, the European Union, and Ukraine, outweighing anticipated declines in sales by Canada, the Russian Federation, and the US, where supplies are forecast to be tighter than in the previous season.

Total wheat utilization in 2021/22 is expected to grow by 2.2 percent, reaching 779 million tonnes, the FAO said, adding that global wheat consumption is seen rising in tandem with population growth, resulting in a relatively stable per capita level.

Despite high wheat prices, feed use of wheat is anticipated to register a strong growth this season, especially in the European Union, China, India, the UK, and the US.

Rice output, trade

The UN agency said global rice production will be a record 518.2 mt despite the output being lower by 1.5 mt from initial estimates. The revision has been forced due to lower cultivation in Indonesia and a yield drop in Sri Lanka.

World rice utilization this season is projected to rise to a fresh peak of 518.8 mt. Though feed and industrial uses of rice are predicted to continue increasing, food intake is envisaged to drive much of the yearly global use expansion, increasing at a slightly faster pace than population growth, FAO said.

International rice trade is now estimated at 51.3 million tonnes in 2022, while its ending stocks are now seen at 187.6 MT, up from 187.1 MT last season. These stocks should be ample enough to meet the projected rise in world rice use, keeping the global stock-to-use ratio at a comfortable 36 percent.

Global coarse grains production has been raised to 1,504.7 MT (1503.6 met & 1,481.7 MT) on better-than-expected yields in Brazil, India, and some West African nations. Maize production is expected to make up for the losses in barley output, particularly in Iran and Turkey where dryness has affected the crop.

Feed use of maize

Among coarse cereals, higher feed and industrial uses of maize account for the bulk of the utilization pegged at 1,514 MT. This is on account of continued robust feed demand in Brazil, China, and Canada, besides higher maize-based ethanol production in Brazil and the US. Sorghum utilization is also forecast to increase on higher food consumption as well as feed use. By contrast, reduced production is expected to curb feed and industrial uses of barley.

Global coarse grain inventories are expected to remain near their opening levels. An anticipated rise in maize stocks, mostly in China and the US, is seen countering a predicted drawdown of barley inventories.

Trade-in coarse cereals will likely head for a contraction at 234.5 MT (235.1 MT and 238.6 MT) driven by expectations of China and Vietnam cutting their purchases. Barley trade could also decline on lower demand from China and Morocco, the US agency said.

Winter crops sowing

Planting of the 2022 winter wheat crop has begun in the northern hemisphere and current high wheat prices are expected to encourage large sowing. But, rising input costs could curb the expansion of the area under wheat in some countries.

South of the equator, countries are sowing the 2022 coarse grain crops. In South America, Brazilian maize production is projected to rebound from its lower level this year, reflecting an expected price-driven area expansion and favorable weather forecasts. Similarly, in Argentina, the maize area will likely increase, though a high probability of reduced rainfall in the coming months could adversely impact early crop development.

Source: The Hindu Business Line

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