FAO Raises Global Cereal Production Estimate For 2018

As per FAOs latest forecast for 2018, the world cereal production is estimated at 2 611 million tonnes, marginally higher than the estimate of December, reflecting upward revisions made for maize, wheat and rice. Global rice production is seen growing by 1.6 percent to 514 million tonnes, 1.2 million tonnes higher than previously forecast. Yield-driven improvements in China support most of the revision. Also, greater than previously expected plantings have raised production estimates for Pakistan, while losses from Tropical Storm Usman and expectations of dryer weather lead to a production forecast cut for the Philippines. Despite this months upward revisions, global cereal production still remains 1.8 percent (47.4 million tonnes) below the record high of 2017. World cereal utilization in 2018/19 is currently forecast at 2 657 million tonnes, up 45 million tonnes (1.7 percent) from 2017/18 and 8 million tonnes above the December forecast. The increase from December reflects upward adjustments made to the feed use of wheat (mostly in Australia) and the industrial use of coarse grains, predominantly maize and barley.

Global wheat utilization in 2018/19 is forecast to reach almost 743 million tonnes, up 3 million tonnes from December and 5.6 million tonnes (0.8 percent) above the 2017/18 estimated level. The increase is concentrated in more wheat used for animal feed, especially in Australia where dry weather conditions have reduced grazing area and necessitated the use of wheat to feed livestock. Elsewhere, an expected slight increase is the feed use of wheat in the European Union is more than offset by a reduction in the Russian Federation where, reportedly, poultry producers are switching to maize for feed.

World cereal stocks are projected to fall by 45 million tonnes (5.6 percent) from their record high opening levels to 772 million tonnes – some 10 million tonnes above the December forecast. At this level, the world stocks-to-use ratio of cereals would remain relatively comfortable at 28.5 percent, albeit down slightly from the 2017/18 level of 30.8 percent, the highest since 2000/01.