ROME, ITALY — Global wheat production is expected to reach a new record of 780 million tonnes in 2021, according to a preliminary forecast issued March 4 by the Food and Agriculture Organization of the United Nations. The record forecast reflects an anticipated rebound in production in the European Union that is expected to more than offset weather-impacted production prospects for output in the Russian Federation.
The preliminary forecast for 2021 was issued along with the FAO’s Food Price Index, which the agency said rose for the ninth consecutive month in February.
The FAO Food Price Index, which tracks monthly changes in the international prices of commonly traded food commodities, averaged 116 points in February, up 2.4% from January and up 26.5% from February 2020.
The FAO Cereal Price Index averaged 125.7 points in February, up 1.5 points, or 1.2%, from January and 26.3 points, or 26.5%, above its February 2020 level.
“Among major coarse grains, international sorghum prices increased the most, rising 17.4% in February, up 82.1% above their values in the corresponding month last year, driven by ongoing strong demand from China,” the FAO said. “International maize prices also rose, albeit by only 0.9% from the previous month. Maize export prices in February were up 45.5% from the previous year, underpinned by continued strong import demand amidst shrinking export supplies. Wheat export prices remained nearly stable in February, but up 19.8% from last year’s level. International rice prices also edged up some more, driven by demand for lower quality Indica and Japonica rice.”
The FAO Vegetable Oil Price Index averaged 147.4 points in February, up 8.6 points, or 6.2%, from January and marking its highest level since April 2012. The FAO said the continued strength reflected firmer prices of palm, soy, rape and sunflower oils.
“International palm oil prices rose for a ninth consecutive month in February, fueled by concerns over low inventory levels in leading exporting countries following below potential outputs,” the FAO noted. “At the same time, soy quotations remained on an upward trajectory, mainly reflecting current global supply tightness prior to the arrival of the new crop in South America. As for rapeseed and sunflowerseed oils, international prices were underpinned by, respectively, lower than initially expected 2021 production prospects in the European Union and further tightening of export availabilities in the Black Sea region. Noticeably, rising crude oil prices also lent support to vegetable oil values.”
The FAO Sugar Price Index rose by 6.4% from January, reflecting production declines in key producing countries together with strong import demand from Asia, which prompted ongoing concerns over tighter global supplies. Expectations of a production recovery in Thailand and a bumper crop in India dampened the increase, the FAO said.
Meanwhile, the FAO Dairy Price Index rose by 1.7% and the FAO Meat Price Index increased 0.6% in February.
In addition to its record forecast for global wheat production in 2021, the FAO said it’s expecting a new and higher estimate for world cereal production in 2020, now seen at 2.76 billion tonnes, a 1.9% increase from the previous year, lifted by higher-than-expected outturns reported for maize in West Africa, for rice in India, and wheat harvests in the European Union, Kazakhstan and the Russian Federation.
The FAO also noted that new projections for 2020-21 include a 2% increase in global cereal utilization to 2.77 billion tonnes and 5.5% increase in world trade in cereals to 464 million tonnes. Additionally, global cereal stocks are now forecast by the FAO to end 2021 at 811 million tonnes, which would be 0.9% below opening levels. World rice and wheat stocks are expected to increase, while those of coarse grains to decline, the FAO said.