Global cereal stocks in 2021/22 up; early prospects point to higher cereal production in 2022 – FAO

FAO’s latest forecast for world cereal production in 2021 has been raised by 2.2 million tonnes and is now pegged at 2 796 million tonnes, 0.7 percent higher on a yearly basis. This month’s upward revision stems from higher estimates for world maize and rice production, while the global production estimate for sorghum has been lowered, moderating the expected monthly aggregate upturn. Incorporating these changes, the global coarse grains production forecast now stands at 1 501 million tonnes, 1.2 percent higher year-on-year. The bulk of the increase rests on higher maize production in the European Union (EU) and India, which more than offsets the estimated low coarse grains production in the Sudan. The forecast for world wheat production remains unchanged this month at 775.4 million tonnes, reflecting an increase in Australia’s output, reinforcing the record level, which was counterbalanced by minor downgrades to the estimates for the EU, Iraq and Paraguay. Following a 2.2 million tonne upward revision, world rice production in 2021 is now anticipated to reach 519.3 million tonnes, up 0.7 percent from 2020 and marking a new peak. Compared to February’s expectations, the increase primarily mirrors more buoyant output prospects for India, where official assessments indicate a record main-crop harvest attained this season. This revision, alongside an upward adjustment to Madagascar’s output estimate, overshadows a downgrade for the United Republic of Tanzania.

The forecast for global cereal utilization in 2021/22 has been lowered to 2 802 million tonnes, 3.5 million tonnes down from the previous report and 1.5 percent (41 million tonnes) above the 2020/21 level. The bulk of this month’s downward revision is due to a 3-million-tonne reduction in global wheat utilization, mostly on lower-than-anticipated use in India on expectation of higher exports. Nonetheless, wheat utilization is still forecast to increase year-on-year by 1.5 percent, to 772.8 million tonnes driven primarily by an expected greater food consumption. Similarly, 2021/22 global coarse grains utilization has been scaled down marginally since the previous forecast, to 1 509 million tonnes, reflecting slightly lower feed use expectations, but it is still seen increasing by 1.4 percent from the 2020/21 level. FAO’s forecast of world rice utilization in 2021/22 has undergone only minor changes since February, continuing to point to a 1.7-percent year-on-year expansion to reach a record high of 520 million tonnes.

Following an 11.6-million-tonne upward revision this month, global cereal stocks ending in 2022 are now forecast to increase marginally (0.5 percent) from their opening levels to reach 836 million tonnes. Based on the latest forecasts, the world cereal stocks-to-use ratio in 2021/22 would stand at 29.1 percent, down slightly from 29.7 percent in 2020/21 and marking an eight-year low, but still indicating an overall comfortable supply level. A higher estimate of wheat inventories in the EU, due to an upward historical production revision and lower expected exports, is primarily behind a 3.6-million-tonne upward adjustment to global wheat stocks this month, now forecast at 291 million tonnes, up 1.0 percent above opening levels. Global coarse grains stocks have also been lifted this month by 4.7 million tonnes, stemming almost entirely from higher global maize stocks in India and the EU as a result of higher production estimates. An upgrade to anticipated reserves held by India has raised FAO’s forecast of world rice stocks at the close of 2021/22 marketing season by 3.2 million tonnes above February expectations to 190.9 million tonnes, which is 0.9 percent above the 2020/21 high.

FAO’s forecast for world trade in cereals in 2021/22 has been raised month-on-month to 484 million tonnes, up 2.7 million tonnes from the previous forecast and 0.9 percent (4.5 million tonnes) above the 2020/21 level. This forecast does not yet assume potential impacts of the conflict in Ukraine on trade flows from Ukraine and the Russian Federation. For the remainder of the 2021/22 season (March 1 – June 30), Ukraine is forecast to export approximately 6 million tonnes of wheat and 16 million tonnes of maize, while the Russian Federation is forecast to export approximately 8 million tonnes of wheat and 2.5 million tonnes of maize. FAO is closely monitoring the developments and will assess the impacts on the 2021/22 global cereal trade in due course. World wheat trade in 2021/22 (July/June) is currently forecast at a record 194 million tonnes, 2.5 percent (4.8 million tonnes) above the 2020/21 level. This reflects an increase of 1.1 million tonnes since the previous report on stronger than earlier-expected demand from Kazakhstan and Saudi Arabia. On the export side, record harvests are seen supporting greater than previously anticipated sales by India and Australia. The coarse grains trade forecast for 2021/22 (July/June) has also been lifted by 1.4 million tonnes since the previous report, but it is still forecast to contract by 0.9 percent (2.1 million tonnes) from the 2020/21 level, reaching 237 million tonnes. The contraction is primarily driven by an expected 1.7-percent decline in global maize trade. Ample exportable availabilities and an intensification of demand, especially from African and Near East Asian buyers, are forecast to sustain a third successive annual expansion in international trade in rice in 2022 (January-December) to 53.4 million tonnes.

Early outlook for 2022 crops

Looking ahead to the 2022 world cereal outturn, FAO’s preliminary forecast for global wheat production points to a fourth consecutive annual increase to 790 million tonnes. The bulk of the growth is expected to originate in North America. In both Canada and the United States of America, price-driven area expansions and a foreseen upturn in yields underpin prospects of year-to-year production gains that would put the 2022 outturns above the previous five-year averages. Mixed outcomes are anticipated in Europe. In the Russian Federation, an improvement in weather conditions following early seasonal dryness is likely to foster a yearly increase in yields and, provisionally, production in 2022 is forecast at 82 million tonnes. A contraction in the wheat planted area in Ukraine is foreseen to result in a production decline this year; nonetheless, the outturn in 2022 is still forecast to remain slightly above the five-year average. This preliminary forecast does not consider the impacts of the conflict. In the European Union, where plantings are estimated to remain almost unchanged on a yearly basis, wheat production is tentatively pegged to fall marginally to 133 million tonnes, due to an expected reduction in yields following the highs registered in 2021. Wheat production in the United Kingdom of Great Britain and Northern Ireland is forecast to remain unchanged from the previous year, as the effects of a slightly enlarged sown area are likely to be offset by a downturn in yields, keeping the national output at about 14 million tonnes. In Asia, small production increases are forecast in India and Pakistan, underpinned by continued supportive government policies and remunerative prices that are estimated to have maintained a high level of sowings. Wheat crop conditions in China (Mainland) are also favourable and production in 2022 is expected to surpass the five-year average. In Near East Asian countries, following early rainfall deficits, widespread and above‑average precipitation in late 2021 and early 2022 improved crop prospects, and outputs in 2022 are foreseen to be close to average levels. Generally favourable precipitation to date in Kazakhstan has bolstered production prospects, and the wheat output is forecast to rise to a slightly above-average level. In North Africa, widespread drought conditions have affected crops in Morocco, western areas of Algeria and central Tunisia, denting overall wheat production prospects in 2022.

Regarding production of coarse grains, harvesting of the 2022 crops is to begin in the next months in the Southern Hemisphere countries, while in countries north of the equator, plantings have not yet begun. In South America, maize outputs in Argentina and Brazil in 2022 are forecast at well above-average levels, notably in Brazil where the maize output is foreseen to reach a record high of 112 million tonnes. The positive outlooks mostly rest on all-time high sowings, after farmers reacted positively to the higher domestic grain prices and strong export demand. In Southern Africa, the production outlook is similarly favourable in South Africa, where, despite a small reduction in plantings, the maize outturn is foreseen to remain well above average in 2022, resting on beneficial weather conditions.

More detailed information can be found in the March issue of Crop Prospects and Food Situation.

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Tags: corn, grain, wheat, FAO