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Cereal output expected to reach an all-time high

Monday, November 9, 2020

The latest FAO Cereal Supply and Demand Brief reduced the world's 2020 cereal production for a second consecutive month, by nearly 13 million tons, largely on expectations of diminished world coarse grains production. However, global cereal output is still forecast at a record of 2,750 million tons, surpassing the 2019 output by 1.6%.

The reduction in the world coarse grains production forecast reflects lower expectations for the maize output in the EU and Ukraine, where continued adverse weather has further reduced yield prospects.

The global wheat production forecast for 2020 is also trimmed slightly this month, on lower output expectations in Ukraine and Argentina due to the impact of dry weather. Prospects for the 2021 winter wheat crop, which is already being sown in the northern hemisphere, are generally strong, reflecting the expectations of increased plantings in response to higher prices in several main producing countries, notably in the EU.

FAO slightly raised its estimate of world total cereal utilization in 2020/21 to 2,745 million tons, which would represent a 1.9% increase from the 2019/20 level, mostly driven by upward revisions for wheat consumption in the EU.

Cuts in world production forecast this month for maize, wheat and rice, amidst a faster pace in exports in response to strong global import demand, are seen to result in lower inventories, especially among the major exporters. FAO has lowered its forecast for world cereal inventories by the end of seasons in 2021 by 13.6 million tons since October to 876 million tons, now falling below the 2017/18 record. The resulting global cereal stock-to-use ratio in 2020/21 stands at 31.1%, still highlighting relatively comfortable global supply prospects in the new season.

FAO expects world cereal trade in 2020/21 to increase by 3.0% from the 2019/20 level to 451 million tons, with expansions predicted for all major cereals, led by a 4.7% anticipated increase in global trade in coarse grains.

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