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According to the latest FAO "Food Outlook", this season’s world cereal supply and demand balance is proving much tighter than in 2011/12 with global production falling short of the projected demand and cereal stocks declining sharply. However, the tightening is not uniform across all cereals. While this season’s maize and wheat supplies are compromised by disappointing harvests, supplies of rice are ample, which is prompting a further build-up of inventories.
Global cereal production in 2012 is expected to fall by 2.7 percent from previous year’s record crop, but almost match the second best performance of 2008. The overall decrease reflects a 5.5 percent reduction in wheat, and a 2.5 percent decline in coarse grains, while the global rice crop is seen to grow by 0.7 percent above last season record. Severe droughts this year in the United States and across a large part of Europe and into central Asia have been the main cause of the reduced wheat and coarse grains crops.
World cereal utilization in 2012/13 is projected to decline slightly from the previous season, but still anticipated to exceed production. Wheat utilization is set to decline by 1.4 percent, mostly on lower feed use after the previous season’s record. Total utilization of coarse grains is forecast to drop nearly 1 percent, largely because of reduced industrial maize use for ethanol production in the United States. By contrast, world rice utilization could increase by 1.5 percent, helping cereal consumption to remain stable.
Based on the latest forecasts for global production and utilization, world cereal stocks at the close of crop seasons ending in 2013 could fall to 497 million tonnes, 4.8 percent (25 million tonnes) less than their opening level. The decline would also reduce the world cereal stock-to-use ratio from 22.6 percent in 2012 to 20.6 percent in 2013, which compares with the low of 19.2 percent registered in 2007/08. This season’s shrinking supplies have tended to lift international prices.
In October, the FAO Cereal Price Index averaged 259 points, down slightly from September, but 12.0 percent higher than in October last year. Reduced export supplies and more expensive grains are forecast to result in a 6.9 percent contraction in cereal trade in 2012/13.
November 2012/ FAO Food Outlook.
http://www.fao.org
