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Global cereal production forecasted to reach record high

20 October 20234 min reading

According to the FAO's October Cereal Supply and Demand Brief, global cereal production in 2023 is on track to reach a record high, with some significant changes and updates since the previous forecast. The latest estimate places global cereal production for 2023 at a robust 2,819 million tonnes, representing a 0.9 percent increase, or 26.5 million tonnes more than the previous year's production. This increase is primarily attributed to improved wheat production prospects worldwide.

The Food and Agriculture Organization of the United Nations (FAO) has raised its forecast for global wheat production by 3.7 million tonnes, reaching a total of 785 million tonnes. This improvement is largely due to more positive yield estimates in Russia and Ukraine, as they have experienced favorable weather conditions that exceeded earlier expectations. However, Canada's wheat output is expected to decline due to persistent dry weather in Alberta and Saskatchewan, resulting in lower yield expectations. Similar challenges have led to reduced wheat production forecasts for Argentina and Kazakhstan.

In contrast, the FAO's forecast for global coarse grains production in 2023 remains largely unchanged at 1,511 million tonnes. Nonetheless, this figure represents a 2.7 percent increase from the previous year. Improved prospects in Brazil, driven by the latest area and yield estimates from the safrinha harvest, have contributed to a slight increase in the forecast for global maize production. Brazil's excellent weather conditions this year are expected to result in record-high maize production in 2023.

The report also discusses rice production, noting that lower-than-expected plantings in Bangladesh, Nigeria, and the Philippines have somewhat reduced production prospects since September. However, these reductions were offset by positive developments in the USA, where significant area rebound and favorable growing conditions are expected to result in a record harvest. As a result, the world rice production forecast for 2023/24 remains stable at 523.1 million tonnes, implying a one percent annual increase.

World cereal utilization in 2023/24 is forecasted to reach 2,804 million tonnes, representing a 0.8 percent increase compared to the previous year. This increase in utilization is primarily driven by higher food consumption, which is expected to offset a drop in feed use of wheat. The total utilization of coarse grains in 2023/24 is forecasted to be 1,500 million tonnes, a 1.2 percent increase from the previous year.

CEREAL STOCKS SOAR TO NEW HEIGHTS

In terms of global cereal stocks, the FAO's forecast for the close of the 2024 season has been raised by 6.1 million tonnes, reaching a record high of 884 million tonnes. This, combined with a lower forecast for utilization, results in a slightly higher stocks-to-use ratio for total cereals in 2023/24, projected at 30.8 percent. Wheat inventories have seen an upward revision of 4.1 million tonnes, reaching 319 million tonnes, primarily due to higher production estimates in Ukraine and Russia. Likewise, maize inventories in Brazil and the USA have been revised upward, contributing to a 1.6-million-tonne increase in the forecast for world coarse grain stocks in 2023/24, which is pegged at 366 million tonnes. World rice stocks at the close of the 2023/24 marketing season are estimated to be around 198.6 million tonnes, marking a 1.7 percent year-on-year increase, with substantial expansions expected in countries such as India, China, Indonesia, and the USA.

GLOBAL CEREAL TRADE EXPECTED TO CONTRACT IN 2023/24

The FAO's forecast for world trade in cereals in 2023/24 remains steady at approximately 466 million tonnes, reflecting a 1.7 percent contraction from the 2022/23 level. This contraction is mainly due to a 3.5 percent decrease in world wheat exports, which is set at 193 million tonnes, and a 0.7 percent decline in global coarse grain trade. The maize trade forecast remains unchanged at 178 million tonnes, with increased shipments from Brazil balancing slight downward revisions in Paraguay and the USA. World rice trade in 2024 is now projected at 53 million tonnes, mainly due to small downward adjustments in West African imports.

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