Cereal supply is tightening in 2022/23

Cereal supply is tightening in 2022/23

Rome/FAO [ENA] In its new Cereal Supply and Demand Brief released on 3rd February 2023, FAO - Food and Agriculture Organization of the United Nations raised its forecast for world cereal production in 2022; however, global cereal supplies are still forecast to tighten in 2022/23. Global cereal output in 2022 is now forecast at 2 765 million tonnes, or 1.7 percent below the 2021 outturn.

Upward revisions for Australia and the Russian Federation now point to a record global output for wheat in 2022, while total coarse grains production is expected to decline by 3.3 percent from the previous year. The forecast for world rice production was revised downward as lower-than-expected output in China more than offset upward revisions for Bangladesh and several other countries. As a result, global rice output is now predicted to decline by 2.6 percent from its all-time high in 2021.

Looking ahead to 2023, early indications point to likely area expansions for winter wheat cropping in the northern hemisphere, especially in the United States of America, driven mostly by elevated wheat prices. However, high fertilizer costs may affect application rates with adverse implications for yields. 

Low domestic prices could result in a small cutback in wheat plantings in the Russian Federation, the world’s largest exporter, while severe war-induced impacts in Ukraine are estimated to reduce winter wheat area plantings by 40 percent.

Record plantings are forecast in India, spurred by high market and support prices, and relatively high plantings are projected in Pakistan as standing water from the 2022 floods is causing less hindrance than initially anticipated. 

In the southern hemisphere countries, most of the 2023 coarse grain crops have been sown. Brazil may post record maize plantings, while those in Argentina could decrease due to low soil moisture levels. Weather conditions augur well for maize yield prospects in South Africa. 

World cereal utilization in 2022/23 is now forecast to drop by 0.7 percent from the previous year, to amount to 2 779 million tonnes, with the total utilization of maize predicted to decline, while wheat use increases and rice utilization

changes little year-on-year. 

The forecast for world cereal stocks is pegged at 844 million tonnes at the end of the marketing year, pushing down the world stock-to-use ratio for 2022/2 to 29.5 percent. 

In its new brief, FAO predicts international trade in cereals in 2022/23 to decline by 1.7 percent from the previous year’s record level to 474 million tonnes.