World cereal utilisation reduced by 24.7 MT – FAO

The reduction stems mainly from a 22.4 million tonne downward revision to the 2019-20 maize utilisation, mostly in the United States of America and China, reflecting a sudden slowdown in feed and industrial demand.

World cereal utilisation for 2020 has been reduced by 24.7 million tonne since the previous report of April, as a result of Covid-19 impact on economic growth, energy markets, and, to a lesser extent, feed demand, Food and Agriculture Organization (FAO) of the United Nations said in a report.

The reduction stems mainly from a 22.4 million tonne downward revision to the 2019-20 maize utilisation, mostly in the United States of America and China, reflecting a sudden slowdown in feed and industrial demand.

The forecast for total wheat utilisation in 2019-20 has also been subject to a downward revision, with cuts to industrial use, especially in the European Union, more than offsetting upward revisions for Canada. World wheat utilisation in 2019-20 is expected to exceed the previous season’s level by 9 million tonne (1.2%), supported by anticipations of rising food consumption.

Lowered food intake forecasts for Nigeria, combined with expected reduced industrial use in China, have resulted in a 1.5 million tonne cut in the forecast for world rice utilisation in 2019-20.
 
Despite the revision, world rice total use would still exceed the 2018-19 record by 0.7%, largely on the back of an expansion in food intake in Asia.

FAO’s estimate for 2019 world cereal production still stands at around 2 720 million tonne, rebounding from the reduced 2018 level by 65.3 million tonne (2.5 %), mostly on increases in wheat, maize, and barley outputs.

FAO’s forecast for world cereal stocks by the close of the 2020 seasons has been revised upwards by 22.6 million tonne to 884 million tonne, now pointing to a likely increase of 13.6 million tonne (1.6 %) from their opening levels and a global cereals stocks-to-use ratio of 31.6 %, up from 30.7 % published last month.

The anticipated Covid-19 induced contraction in industrial and feed uses could push US maize stocks to a record 62 million tonne, which would be 5.6 million tonne (10%) above their opening levels.

World wheat inventories are still forecast to remain above their opening level, by 1 million tonne (0.4%), as downward revisions in the European Union are offset by predicted increases in the Russian Federation and Turkey.

World rice stocks are expected to approach an all-time high of 183 million tonnes. India is foreseen to account for much of the anticipated rise in the major rice exporters’ inventories in 2019-20, compensating for expected drawdowns in the US and Vietnam, as well as in Bangladesh, China, Indonesia and Nigeria.

FAO’s forecast for 2020 world wheat production points to an output of roughly 762.6 million tonnes, a comparable level to the 2019 production which, if materialized, would be the second highest on record. Smaller harvests are expected in the European Union, North Africa, Ukraine and the US. These declines will likely be compensated by production rebounds foreseen in Australia and Kazakhstan as well as bigger harvests in the Russian Federation and several countries in Asia, in particular India.

FAO