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FAO Cereal Supply and Demand Brief
The Cereal Supply and Demand Brief provides an up-to-date perspective of the world cereal market. The monthly brief is supplemented by a detailed assessment of cereal production as well as supply and demand conditions by country/region in the quarterly Crop Prospects and Food Situation. More in-depth analyses of world markets for cereals, as well as other major food commodities, are published biannually in Food Outlook.
Monthly release dates for 2023: 3 February, 3 March, 7 April, 5 May, 2 June, 7 July, 8 September, 6 October, 3 November, 8 December.
World cereal production in 2023/24 seen on par with the 2021 record outturn
Release date: 08/09/2023
FAO’s forecast for global cereal production in 2023 has been revised down by 4 million tonnes compared to the previous figure released in July. Nevertheless, despite this month’s downgrade, world cereal production is seen increasing by 0.9 percent year on year, reaching 2 815 million tonnes, on par with the 2021 record outturn. Most of the reduction this month relates to a downturn in global wheat prospects, with the world output now pegged at 781.1 million tonnes, 2.2 million tonnes lower than expectations in July. At this level, the world output is set to decline by 2.6 percent year on year but would still be the second largest outturn on record. Downward revisions that have been made to production forecasts for Canada and the European Union, due to continuing dry-weather conditions that curtailed yields, accounted for much of this month’s decrease. The wheat production forecast for China was also scaled down, albeit by a smaller margin, as heavy rains in key producing regions downgraded yield prospects. Offsetting some of these reductions, production forecasts were raised for the United States of America, where updated survey data indicated a larger spring wheat area, as well as for India and Ukraine, reflecting recent government data indicating higher than previously anticipated yields. The forecast for global coarse grains production in 2023 is down 1.3 million tonnes compared to July’s outlook and now stands at 1 511 million tonnes, still up 2.7 percent on a yearly basis, with the bulk of the new cuts stemming from barley and oat crops. The forecast for world barley production was reduced by 2.9 million tonnes to 143.8 million tonnes, down 5.6 percent year on year. The lower production outlook reflects a deterioration of crop conditions and yield prospects in the European Union and Canada. The diminished outlook for global oat production largely concerns lower crop prospects in Canada, the European Union and the United States of America, driven by lower-than-expected planted areas as well as yields. This is expected to result in the global oat outturn in 2023 decreasing to an 11-year low estimated at 23.1 million tonnes. Partly compensating for these declines, world maize production has been raised by 3.6 million tonnes and is now forecast to reach a record high of 1 215 million tonnes. The upturn in prospects is linked to better crops in Brazil and Ukraine, where maize yields are exceeding earlier expectations, more than offsetting production cuts made for the United States of America and the European Union. As for rice, FAO’s global production forecast for 2023/24 has also been lowered since July by 500 000 tonnes, down to 523.2 million tonnes, which is still 1.1 percent above the 2022/23 reduced level. The revision primarily mirrors lower area estimates for Indonesia’s April-concluded main-crop harvest as well as reduced expectations for Thailand, where main-crop plantings have lagged behind year-earlier levels due to irregular rains and reduced water supplies for irrigation. Excess rains and flooding in north-eastern provinces also reduced harvest expectations for China somewhat. These revisions were partly offset by forecast upgrades for various other countries, in particular Cambodia, Colombia, the Islamic Republic of Iran, Nigeria and the United States of America, in all cases largely due to higher plantings than previously envisaged.
World cereal utilization in 2023/24 is forecast at 2 807 million tonnes, up 1.5 million tonnes since July and 22.1 million tonnes (0.8 percent) above the 2022/23 level. Higher wheat utilization in India, stemming from larger anticipated domestic production and availability, is mostly behind a 2.3-million-tonne upward revision in the global wheat utilization forecast for 2023/24, now pegged at 785 million tonnes, up 0.6 percent above its 2022/23 level. The forecast for total utilization of coarse grains in 2023/24 is pegged at 1 501 million tonnes, down 1.6 million tonnes from the July forecast but still up 1.2 percent from the 2022/23 estimated level. Lower anticipated utilizations of barley for feed in Canada and the European Union are behind this month’s downward revision, reducing the total barley utilization forecast for 2023/24 down to 0.8 percent below last season’s level. World rice utilization in 2023/24 is now pegged at 520.9 million tonnes, up 800 000 tonnes from July expectations and broadly stable year-on-year. Although a tighter overall supply outlook led to downgraded forecasts for a host of Asian and African countries, these revisions were outweighed by an upward adjustment made for India, where another comparatively large harvest on the backdrop of reduced exports could keep food intake above pre-pandemic levels for another season, while volumes destined to ethanol production remain on an expansionary trend.
Pegged at 878 million tonnes, the forecast for world cereal stocks by the close of the 2023/2024 seasons is unchanged from July, pointing to an increase of 18.6 million tonnes (2.2 percent) above opening levels. The resulting world stocks-to-use ratio for cereals in 2023/24 would be 30.5 percent, nearly unchanged from the 2022/23 level of 30.6 percent, and indicating an overall comfortable global supply level from a historical perspective. World wheat stocks are forecast to rise marginally, by 0.3 percent, above their opening levels to 315 million tonnes, reflecting an upwards revision of 1.3 million tonnes this month mostly concentrated in the Russian Federation, Turkey, Ukraine and the United States of America. The forecast for the world total coarse grain stocks stands at 365 million tonnes, up 4.3 percent above opening levels, despite a 1.0-million-tonne cut to the forecast this month largely due to downward revisions to global inventories of barley and oats, which offset an upward revision to global maize stocks. Despite a 435 000 tonne downward revision, world rice stocks at the close of 2023/24 marketing seasons remain forecast to reach an all-time high of 198.1 million tonnes, up 1.4 percent from the 2022/23 reduced level. As in previous seasons, nearly three-quarters of this volume is expected to be held by China and India, with India, in particular, envisaged to be behind much of the world’s forecast stock expansion in 2023/24. Elsewhere, even though some stock replenishments are anticipated, most notably in Indonesia, Nigeria, Pakistan and the United States of America, these will likely be insufficient to compensate for drawdowns expected in other countries. On aggregate, total rice reserves held by countries other than China and India are seen ending with a second successive contraction to a four-year low of 51.4 million tonnes.
FAO’s forecast for world trade in cereals in 2023/24 has been reduced by 6.5 million tonnes since July down to 466 million tonnes, 1.7 percent (7.9 million tonnes) below the 2022/23 level. The forecast for world wheat trade in 2023/24 (July/June) has been lowered since the previous report in July, by 1.9 million tonnes, to 193 million tonnes, which would be 3.5 percent below the 2022/23 level. The anticipated contraction from last season is led by a foreseen fall in exports from Australia, owing to reduced production, and Ukraine because of trade disruptions from the ongoing war, as well as lower import demand by China, the European Union and Turkey. World trade in coarse grains in 2023/24 (July/June) is forecast at 220 million tonnes, down 1.6 million tonnes since July and 0.8 percent lower than the 2022/23 level. A cut to the forecast for world maize trade in 2023/24, accounting for the bulk of this month’s downward revision, mostly reflects smaller-than-earlier-predicted maize sales by the United States of America, stemming from reduced production prospects, and by Ukraine, as a result of the recent cessation of the Black Sea Grain Initiative. FAO has lowered its forecasts for international trade in rice in 2023 by 600 000 tonnes and in 2024 by 3.0 million tonnes since July. The revisions largely follow the recent stepping up of rice export restrictions by India, the world’s leading rice exporter. Although the duration of these restrictions and their extent of application remain uncertain at this stage, given the leeway provided by Indian officials for exceptions to be approved on food security grounds and upon requests from governments, should they prove protracted and coupled with potential El Niño-induced production constraints in a few other Asian exporters, they could keep the anticipated recovery in world rice trade in 2024 under 1.0 million tonnes to 53.3 million tonnes.