• Thursday, March 28, 2024
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Global wheat production to rise 4% as trade slows – FAO

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World wheat production for 2019 has been projected to rise 4 percent above the level attained in 2018. Food and Agricultural Organisation’s (FAO) first forecast on wheat this year bets on production to hit 757 million metric tons, as it sees trade declining.
At almost 171 million tons, the forecast of global wheat trade trimmed by about 800,000 tons since February on account of lower than anticipated purchases by several Asian and South American countries.

With this, world wheat trade would be down 3.3 percent from the 2017-18 record level. The total trade in coarse grains is also seen contracting by 0.7 percent from 2017 to 2018 to around 195 million tons in 2018/19.

The latest indicates a 1.1 million tons drop from February, as a downward adjustment to global trade in barley – reflecting further cuts in China’s imports – should more than offset an expected increase in maize trade.

For coarse grains, harvesting of the 2019 crops in southern hemisphere countries including Argentina and Australia is expected to begin in the coming months, while planting operations will commence in May in the northern hemisphere.

Also following the downward revision of the 2018 world cereal production, the forecast of global cereal utilisation in 2018 and 2019 has also been lowered to 2.65 million tons, with most of the revision driven by expected cuts in the feed use of major coarse grains, especially in the United States.

However, world utilisation of coarse grains in 2018 and 2019 is still set at 2.0 percent above the previous season’s level, while global utilisation of rice is seen to expand by 0.9 percent and that of wheat by 0.5 percent.

FAO’s forecast of global cereal stocks for crop years ending in 2019 has been lowered since February to 766.5 million tons. At these forecast levels, the ratio of global cereal carryovers to utilisation in 2018 and 2019 would fall from 30.5 percent in 2017 and 2018 to 28.3 percent in 2018 and 2019, which still represents a relatively high level.

The latest downward adjustment mostly concerns the inventories of wheat and maize, while forecasts for end-season stocks of barley and rice have been raised since the previous report.

Larger than earlier anticipated drawdowns of maize stocks in southern hemisphere countries and the United States are also seen to push down total coarse grains stocks in 2018 and 2019 by almost 11 percent.

Following further downward revisions to wheat stocks in several Asian countries and Argentina, total wheat inventories are expected to decline by almost 4 percent from their opening levels.

By contrast, global rice stocks are set to reach a new record high, up 3 percent from their opening level, with India and China leading the season’s stock expansion.
FAO’s forecast for world trade in cereals in 2018/19 also lowered by 2 million tons from February’s to just over 413 million tons.
Wheat prices gained 1.23 percent or $5.50 dollar to $452.75 Thursday according to Bloomberg data on wheat futures, although the grain has lost 10 percent so far in 2019.