FAO Cereal Supply and Demand Brief Sees Improved Production Prospects, High Stocks
Updated at 1463508026
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The FAO is predicting 2016 global cereal production to be nearly 2,526 million tonnes, up slightly from production forecasts in April. This slight revision comes mainly from increased wheat production forecasts, which rose 4 million tonnes in May. Much of this increased production is based on improved yield prospects in Europe, which are expected to outweigh the effects of poor weather conditions in India. Growth in anticipated global wheat production remains 16 million tonnes below the record production seen in 2015, however.

Global coarse grain production remains largely unchanged from April but at 1,314 million tonnes is 1 percent higher than 2015 production. Maize forecasts have deteriorated in Southern African as a result of severe drought caused by the 2015-2016 El Niño cycle; these reductions have offset larger than expected crops in Brazil.

El Niño has also impacted global rice crops, delaying and damaging harvests in the southern hemisphere and along the equator. Despite this, however, FAO predicts that global rice production in 2016 will be 1 percent higher than 2015 levels.

Predictions for global cereal use rose only slightly from April's expectations and just 1.1 percent above 2015-2016 levels. This marks the second consecutive year of below average growth in cereal utilization, says the report. This slowing pace is due largely to reduced utilization of cereals for animal feed.

Based on these expectations for production and use, FAO sees global cereal ending stocks down by 615 million tonnes by the end of the 2017 cropping seasons; however, this decline is 4 million tonnes less than originally predicted in FAO's first forecast for 2016-2017. In addition, the stock-to-usage ratio is expected to decline by only 1.5 percent.