The Food and Agriculture Organization of the United Nations, FAO, released its first forecasts for global wheat supply and demand in the 2020/21 marketing season. World production is forecasted at 762.6 million tons. The number broadly corresponds with the level of 2019. The harvests expect to be lower in the European Union, North Africa, Ukraine, and the USA. On the other hand, predictions show the most abundant in Australia, Kazakhstan, the Russian Federation, and India.
Forecasts show that world wheat consumption in 2020/21 remains stable. Moreover, expected increases in food use outweigh reductions in forage and industrial applications. At the end of the agricultural seasons in 2021, stocks of wheat anticipate a rise to 274.5m tonnes, driven by the expected substantial increase in stocks in China. Meanwhile, estimates show that global stocks should grow in the rest of the world.
FAO also foresaw high corn production this year in Argentina, Brazil, and South Africa, where harvesting will begin soon.
Lower consumption of cereals with full stocks in 2019/20
FAO maintained its forecast of world production for 2019 of 2 720 million tons. However, the organization reduced its forecast for the consumption of cereals in 2019/20 by 24.7 million tons, primarily as a result of the effects of COVID- 19 in economic growth, energy markets, and demand. The new forecast primarily reflects the decline in corn use in China and the United States.
FAO also lowered its forecast for the use of rice due to the expected decline in food consumption in Nigeria. However, overall rice consumption expects to hit a new record. It was driven by a year-on-year increase in food consumption in Asia. Wheat utilization in 2019/20 has forecasted to rise 1.2 percent from the previous season.
Lower consumption rates lead to an increase in world cereal stocks at the end of the 2020 season. They now stand at 884 million tonnes or 13.6 million tonnes above their initial levels. Moreover, the FAO forecast of the ratio of world cereal stocks raised to 31.6 percent. The increase in cereal stocks primarily reflects the projected rise in corn inventories, which have expectations to reach a record high of 428 million tonnes.
Prognosis shows that world cereal trade in 2019/20 will increase by 2.8 percent to 422 million tonnes, led by sorghum and wheat. Export restrictions on wheat from the Black Sea region have lifted in most cases. They are not likely to affect export commitments by producer countries.