LONDON, ENGLAND — The International Grains Council (IGC) on March 26 issued its latest Grain Market Report in which it forecast an increase in global grains production, trade and consumption for 2020-21. However, its projection came with a caveat due to the coronavirus (COVID-19) pandemic that has infected more than 700,000 people worldwide and killed about 35,000.
“The past month has seen escalating concerns about the global spread of the coronavirus and increasing uncertainty about the longer-term implications for production and consumption,” the IGC said. “While some commodities have seen a sharp upturn in nearby demand, especially for rice and wheat-based foods, weakening economic conditions could dampen usage in the longer term, particularly for industrial products such as maize-based ethanol and starch.”
The IGC said although import buying of some commodities has accelerated in recent weeks, logistical challenges are being reported as movement constraints and quarantine measures become widespread.
“Transportation restrictions could also hamper the distribution of farm inputs and disrupt spring fieldwork,” the IGC said. “However, at this stage, the IGC assumes that planting intentions will be fulfilled. Nevertheless, the Council's projections for supply and demand are tentative until the progress and duration of the pandemic become clearer.”
In its first full set of supply and demand projections for 2020-21, the IGC sees total grains production reaching a new peak of 2.22 billion tonnes, about 2% higher year on year, while consumption is also forecast at 2.22 billion tonnes. Trade is expected to reach a new high of 385 million tonnes, including increased shipments of wheat, maize and sorghum.
Reflecting downgrades for Brazil and Argentina, global soybean production is forecast to drop 5% to 341 million tonnes in 2019-20. Assuming a rebound in US acreage, world soybean output in 2020-21 is expected to expand by 7% to 366 million tonnes, with trade projected to reach a record of 157 million tonnes, the IGC said.
Global wheat production in 2019-20 is projected to increase by 4% from the previous year to a new record of 763 million tonnes, with the IGC also forecasting another production record in 2020-21 of 768 million tonnes. Total consumption is forecast to grow by 2% in 2019-20 over the previous year and another 1% in 2020-21 to 760 million tonnes.
The 2019-20 global maize crop is forecast to be 1% smaller year-over-year, with declines in the United States and Argentina more than offsetting gains in the European Union, Brazil, China and South Africa. At 1.11 billion tonnes, the estimate is raised by 4 million from the previous month, primarily on an upgraded official EU number, but with increases too for some southern hemisphere exporters, the IGC said. It forecasts production to increase slightly in 2020-21 to 1.15 billion tonnes.
“Against the backdrop of the coronavirus pandemic, maize consumption forecasts are quite tentative, but with overall levels of demand assumed to remain high in 2019-20,” the IGC said. “Based on a reduced US ethanol figure, the global maize consumption forecast is 1 million tonnes lower month on month at a record 1.15 million tonnes.”
Global rice production is seen unchanged at 499 million tonnes in 2019-20 but is forecast to rise to 509 million tonnes in the upcoming marketing year, the IGC said. Consumption rose 1% to 495 million tonnes in 2019-20 and is expected to rise another 1% to 501 million tonnes in 2021.
“Although the impact of the coronavirus pandemic is highly uncertain, consumer purchasing has spiked in recent weeks, leading to firmer international prices, although this could contain usage in the latter stages of the season,” the IGC said.
For the full IGC report, go to: https://www.igc.int/en/gmr_summary.aspx
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