The FAO Food Price Index remained steady in April, averaging 173.5 points for the month, a slight increase from March and 2.7% higher than in the same month of 2017.
According to the FAO’s first forecasts for the 2018-19 marketing season, cereal supplies should be sufficient to meet consumption requirements.
“While global cereal reserves are forecast to decline, the decrease is likely to mostly concern maize,” the FAO said. “Early indications also point to an only marginal contraction of world cereal trade from the 2017-18 record high, sustained by firm import demand particularly for barley, wheat and rice.”
Global cereal crops output in 2018 is expected to fall to 2.607 billion tonnes, about 1.6% below the near-record harvest of 2017, according to the FAO’s Cereal Supply and Demand Brief.
“The decline is mostly due to an anticipated contraction in maize production, especially in U.S.,” the FAO said. “Lower wheat output is mostly associated with an expected decline in the Russian Federation after an exceptional outcome the year earlier.”
The FAO forecasts world rice production to increase by 1.3% to reach 510.6 million tonnes, setting a new record high and attributes the increase primarily to expanded cultivations in Asia.
As for cereal utilization, the FAO’s forecast for cereal utilization, both food and feed, is anticipated to be another record high of 2.626 billion tonnes.
“That reflects a projected 1% increase in world rice utilization, a 0.8% expansion in global wheat utilization and a 0.4% rise in total utilization of coarse grains, of which maize feed use is expected to increase by as much as 2.8% to a new high of 615 million tonnes,” the FAO said. “The largest year-on-year increase in the feed use of maize is envisaged in China and South America.”
According to the FAO, world cereal stocks at the close of seasons ending in 2019 are expected to decrease by 2.7% and the world cereal stocks-to-use ratio to drop to 27.2%, down from its 16-year high level of 28.8% in 2017-18 but above the historical low of 20.4% registered in 2007-08.
The FAO’s first forecast of international trade in cereals in the year ahead is pegged at 406 million tonnes, implying a mere 0.6% decline from the all-time high anticipated for the current season.