Photo courtesy of FAO.
“Global markets of all major cereals remain well balanced, supported by record inventory levels,” according to FAO’s new Cereal Supply and Demand Brief.
The report expects world cereal supplies to reach nearly 3.331 billion tonnes.
The FAO’s estimate for global cereal production in 2017 is currently at a record high of 2.640 billion tonnes, 1.3% above the 2016 estimate. The estimate has been raised by 13.5 million tonnes since December, marking a second consecutive substantial upward revision.
The rise in estimate is due to an expected increase in grain output in several areas around the globe.
The FAO is estimating an increased maize output from China, Mexico and the E.U., as well as increased output of wheat due to larger harvests in Canada and Russia. Rice production is anticipated to rise in China.
“Projected cereal utilization in the 2017-18 season was also raised, now up 1.4% from 2016-17,” the FAO said. “The upward revision includes a notable jump for coarse grains, whose use for livestock feed is forecast to reach an all-time high on the back of sizable increases projected for Brazil, China, the E.U. and Mexico.”
The FAO noted a 27.7% world stock-to-use ratio, which would be the highest since 2001-02. All major cereals international trade volumes are expected to slightly fall except maize.
“The FAO Food Price Index averaged 169.5 points in January, nearly unchanged from the previous month, as rising prices for staple grains and palm oil were offset by declining quotations for sugar, butter and cheese,” the organization said.
The FAO’s Cereal Price Index rose about 2.5% in December, driven in part to large supplies, weather and a weak U.S. dollar.
The index, which covers wheat, rice and coarse grains, including maize, is 6.3% higher than its January 2017 level.
The FAO’s Food Price Index is a trade-weighted index tracking international market prices for five major food commodity groups.