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The forecast for 2019 global cereal production lowered while stocks raised

08.10.2019 09:05 "Agro Perspectiva" (Kyiv) Ś FAO lowered its forecast for global cereal production in 2019áby 2.2ámillion tonnes, pegging the world cereal output at 2á706ámillion tonnes, but still up 53ámillion tonnes (2.0ápercent) from the outturn in 2018. The latest cut emanates mostly from reduced prospects for global rice and wheat outputs, which outweighed a bigger production forecast for coarse grains. Global wheat production is pegged at 766ámillion tonnes, down nearly 1ámillion tonnes from last monthĺs forecast, though still a record high. The reduction reflects a cut to Australiaĺs production forecast on account of continued dryness in eastern regions. This decline more than offset an upward revision to the production estimate for the European Union, where recent field data indicate better than previously anticipated yields. The latest forecast for global rice production (milled equivalent) is set at 513.5ámillion tonnes, down 3.8ámillion tonnes from the previous report and just 0.8ápercent below the high output level registered in 2018. India accounts for the bulk of the month-on-month downward revision, as a series of weather setbacks caused planting delays leading to expectations that farmers would plant less than previously anticipated. Production prospects also deteriorated in the United States, where excess rains are now estimated to have triggered more pronounced area cuts than earlier envisaged. Similarly, in the Philippines and China, recent reports indicate a lower area planted in 2019, resulting in a small downgrade of the production forecasts for these countries. By contrast, production outlooks improved in Colombia and Madagascar, where crops have already been harvested and official estimates indicate better than previously anticipated yields. World coarse grains production is forecast at 1á427ámillion tonnes in 2019, up 2.5ámillion tonnes from the previous report issued in September. The more buoyant expectations mostly rest on an improved outlook for global barley production, while the overall positive prospects for the world maize output were further reinforced following a lifting of the production estimate for Brazil, where the major second season harvest is nearing completion. Additionally, the forecast for maize production in the United States has been raised on larger-than-expected plantings; however, an equivalent cut in the forecast for the European Unionĺs production negated any impact on the global outlook. Looking further ahead, planting of the 2020áwheat crop in the Northern Hemisphere is already underway. In the Russian Federation, early indications point to an area expansion, which would support the short-term trend underpinned by government policies that seek to boost exports, while by contrast dry weather conditions have curtailed planting expectations in Ukraine. For coarse grains, the 2020ácrops are being planted in southern hemisphere countries, with harvesting expected to commence in the first quarter of next year. In Brazil, following a record output in 2019, plantings of the first season crops are progressing under mostly favourable weather conditions and an increase in the minimum producer price for maize, set by the government, could prompt an area expansion. In South Africa, higher year-on-year prices and tighter domestic supplies could instigate an increase in the sown area and result in a production rebound in 2020. World cereal utilization in 2019/20áis now forecast at 2á714ámillion tonnes, down 1.7ámillion tonnes from September, but still 34ámillion tonnes (1.3ápercent) higher than in 2018/19áand marking a record high. The forecast for total wheat utilization has been raised by 1.5ámillion tonnes since the previous report to 761.5ámillion tonnes, which is also a record exceeding by 2.0ápercent the 2018/19áestimated level. At nearly 518ámillion tonnes, food consumption accounts for most of the total utilization of wheat. However, driven by large supplies and attractive prices, the projected increase in world wheat utilization in 2019/20áis also boosted by an expected 3.6-percent rise in its feed use, which could reach an all-time high of 146ámillion tonnes. Total utilization of coarse grains in 2019/20áis forecast at 1á436ámillion tonnes, down marginally from the September report but still a record high, up 1.0ápercent (14ámillion tonnes) from 2018/19. While the bulk of the year-on-year increase in total utilization of coarse grains is due to stronger demand for maize, especially for industrial use, the forecast for maize feed use in 2019/20áhas been trimmed by around 5ámillion tonnes since the previous report, to just over 648ámillion tonnes. The revision largely stems from downward adjustments to feed use estimates in China and the EU. FAOĺs new forecast for world rice utilization in 2019/20áis pegged at 516ámillion tonnes, down 2.3ámillion tonnes from September due to less buoyant domestic use prospects for Asia. Nonetheless, at this level, global utilization of rice would still exceed the 2018/19árecord high by 1.1ápercent, driven by expanding food intake. The forecast for world cereal stocks by the close of the 2020áseasons has been raised by 2.4ámillion tonnes since the previous month to 850ámillion tonnes, but still down 17ámillion tonnes (2.0ápercent) from their opening levels. This monthĺs higher forecast for ending stocks, combined with a lower forecast for utilization, results in a slightly higher stocks-to-use ratio for total cereals in 2019/20, now projected at 30.4ápercent, still down slightly from 31.9ápercent in 2018/19. Among the major cereals, global wheat inventories are anticipated to register a 1.6ápercent (4.2ámillion tonnes) increase from their record high opening level to total 273ámillion tonnesá- the second highest on record. The increase is expected to be concentrated in Asia, in particular in China and, to a lesser extent, India, more than offsetting anticipated declines in several major exporting countries. By contrast, despite this monthĺs higher forecast of ending stocks in the United States, world maize inventories are still foreseen to register a significant decline in 2019/20, falling by as much as 7ápercent (25ámillion tonnes) from their relatively high opening levels to a 4-year low of 337ámillion tonnes. This is mostly because of a predicted sharp drop in maize stocks in China, making up almost 70ápercent of the year-on-year projected decrease. Global rice stocks at the close of 2019/20áare pegged at 179ámillion tonnes, up 800á000átonnes from previous expectations, but still 1.9ápercent below the 2018/19áall-time high of 183ámillion tonnes. This monthĺs adjustments mostly stem from upward revisions to carry-overs in India, where record-breaking local procurement during the 2018/19áseason is likely to result in larger than previously anticipated public inventories. These increases outweighed reductions to stock forecasts mainly for China and the United States. FAOĺs latest forecast for world trade in cereals in 2019/20áremains at around 415ámillion tonnes, unchanged from last month and 0.7ápercent (almost 3ámillion tonnes) above the 2018/19álevel, with expectations of higher wheat, rice and barley trade just marginally offsetting lower maize and sorghum trade. World wheat exports in 2019/20á(July/June) are set to rebound by 3.4ápercent (5.7ámillion tonnes) to reach 173.5ámillion tonnes, mostly because of stronger import demand in Morocco and Asian countries. To meet this increase, several countries are forecast to raise their sales in 2019/20, in particular Argentina, the EU and Ukraine. On the other hand, shipments from Kazakhstan and the Russian Federation will most likely decrease, largely because of tighter domestic supplies than in the previous year, although the Russian Federation would remain the worldĺs largest wheat exporter also in 2019/20. Following an 800á000átonne downward revision since September, world rice trade in 2020á(January-December) is now forecast to amount to 48ámillion tonnes, up 3.5ápercent from the 2019álevel, with much of the expected recovery imputable to strong African import demand. For coarse grains, however, even with this monthĺs small upward revision, trade in 2019/20á(July/June) is foreseen heading to an annual decline of 2.2ápercent (4.4ámillion tonnes), with expected lower maize imports by the EU, China and Canada accounting for most of the decline. Total maize trade in 2019/20áis pegged at around 161ámillion tonnes; while down by over 4ámillion tonnes from the peak registered in 2018/19, it would still be the second highest on record. From the maize exportersĺ perspective, shipments from the United States and Ukraine are foreseen to fall sharply, while sales from Argentina and Brazil could attain near-record, if not record, levels.

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