EU exports of cereals are expected to increase by 14% compared to 2021/22, partially offsetting the reduction in global exports being caused by the blockage of Ukrainian sea ports and export restrictions that have been put in place by some exporters, European Commission said in its latest agricultural markets report.

European Commission published its latest short-term outlook for EU agricultural markets amidst global food security concerns. Published on 7 July 2022, the report presents a detailed overview of the latest trends and prospects for a range of agri-food sectors.

Here are highlights from the report:

In the EU, production of grains is affected by dry weather conditions in several regions. As a result, the forecast for EU production of grains is lower than expected and below 2021 levels. However, the existing stocks will help to meet domestic consumption needs and some of the export demand, which is expected to remain high in view of pressures on global markets. The EU animal sector (meat and dairy) faces its own challenges with animal disease outbreaks and high feed prices. However, food availability in the EU is not at risk.

Cereal prices remain very high and volatile due to uncertainty about the global level of supply caused by the Russian invasion of Ukraine, which further aggravated high energy and fertiliser prices and the post-COVID demand for animal feed.

Total EU cereal production is expected to reach 286.4 million tonnes, 2.5% lower than the season of 2021/22. However, the demand for animal feed and for cereals to produce biofuels is expected to decrease by 1.3% and 3% respectively, and the EU has relatively high cereal stocks. EU exports of cereals are expected to increase by 14% compared to 2021/22, partially offsetting the reduction in global exports being caused by the blockage of Ukrainian sea ports and export restrictions that have been put in place by some exporters.

The total availability of EU cereals in 2022/23 is expected at an almost identical level of the previous season. A higher level of beginning stocks (+20% to 50.1 million t) will help compensate for lower production which is forecast to decline to 286.4 million t (-2.5% year-on-year). The drop in production is due to the hot and dry spring in key EU cereal production areas and could fall further if current overall adverse weather conditions, notably drought, continue. This level of availability will ensure adequate supply for domestic consumption and will also allow, combined with lower imports, EU cereals net exports to increase to 33.5 million t, partially offsetting the drop due to the blockage of the Ukrainian sea ports and export restrictions in place by some exporters.

The derogation to allow the production of any crops for food and feed purposes on fallow land, granted in March by the Commission, resulted in an increase in sown areas of protein crops for 2022/23. The projected increase in area stands at 6% (2.2 million hectares) for protein crops year-on-year. Thanks to the increased production, EU exports of protein crops are expected to grow by 19% compared with last year.