Despite improved wheat and rice production prospects, global 2024 cereal output moderately below the 2023 level – FAO

FAO’s latest forecast for global cereal production in 2024 has been raised marginally this month to 2 853 million tonnes, reflecting upward revisions to rice and wheat outputs that outweighed a minor reduction of global coarse grains production. Despite these latest revisions, global 2024 cereal production is still foreseen to decline moderately below the level of 2023.

World wheat production is pegged at 792.9 million tonnes in 2024, marking a 0.2 percent increase compared to the previous month and now 0.5 percent up on a yearly basis. The bulk of this month’s increase is related to improved wheat prospects in Australia, where conducive rainfall patterns in western parts following a dry start to the season, have bolstered yield expectations. This upward revision more than offsets a sizeable cut to the wheat production forecast for the European Union, where overly wet weather is seen curbing yields by a greater degree than previously anticipated. The forecast for world coarse grains production in 2024 has been scaled back slightly this month to 1 521 million tonnes, and now sits 0.8 percent below the previous year’s level. The downgrade  is mainly driven by reductions to maize and barley forecasts in the European Union, where adverse weather conditions have diminished yield prospects. However, the maize production forecast for the United States of America has been raised following recent field assessments pointing to better-than-previously expected yields, underpinned by near-ideal weather conditions throughout the season. As for rice, production forecasts have been scaled back for various countries since September, most notably for Myanmar, where recurring flooding problems, including those brought about by Typhoon Yagi, have exacerbated disruptions caused by an intensification of conflict, labour shortages and increases in production costs. However, downward revisions for these countries were largely overshadowed by a more upbeat outlook for India, where a strong pace of plantings and conducive rains over most parts of the country raise expectations of a record Kharif crop being harvested this season. As a result, world rice production in 2024/25 is now predicted to reach a historical high of 539.2 million tonnes (milled basis), up 0.9 percent from a revised 2023/24 estimate and 2.2 million tonnes more than expected in September.

World cereal utilization is set to increase by 12.4 million tonnes (0.4 percent) in 2024/25 from the 2023/24 level, reaching 2 853 million tonnes, up 4.1 million tonnes since September. The forecast for total wheat utilization is pegged at 793.7 million tonnes, up only marginally from last month but still 4.9 million tonnes (0.6 percent) below the 2023/24 level. Although food consumption of wheat is projected to grow in 2024/25, both feed and other uses of wheat are expected to decrease, especially in China (mainland) and India. At 1 527 million tonnes, the forecast for total utilization of coarse grains in 2024/25 is up nearly 1 million tonnes since the previous report and 8.3 million tonnes (0.5 percent) higher than the 2023/24 level. This month’s upward revision mostly reflects higher use of maize and sorghum largely in Argentina. World rice utilization in 2024/25 is now envisaged to expand by 1.7 percent year-on-year to a fresh peak of 535.6 million tonnes. This forecast stands some 2.7 million tonnes above September expectations, largely on account of upward revisions to anticipated uses in India, consistent with the improved supply prospects for the country, but also with the Government’s decision to resume public stock releases of rice for ethanol production.

The forecast for world cereal stocks by the close of the 2025 seasons has been revised downwards by 1.7 million tonnes since the previous month to 888.1 million tonnes but is still up 10.5 million tonnes (1.2 percent) from the opening level. With the new forecast, the global cereal stocks-to-use ratio in 2024/25 would remain nearly unchanged from last season at 30.6 percent, continuing to indicate comfortable supply prospects in the new season. Global wheat inventories are now anticipated to rise marginally in 2024/25 above their opening levels, by 0.2 percent, to 316.2 million tonnes, following a 1.7-million-tonne upward revision this month. This month’s increase mostly reflects higher stock estimates in Australia and Ukraine stemming from larger production estimates, as well as the European Union on account of lower anticipated utilization. FAO’s forecast for world coarse grains stocks has been lowered this month by 4.6 million tonnes with cuts to maize and barley stocks mostly concentrated in the European Union as a result of a downgrade to the production forecasts. Despite these revisions, world coarse grain stocks are still forecast to increase in 2024/25 to 365.8 million tonnes, up 0.8 percent (2.8 million tonnes) above their opening levels, due to an anticipated rise in world maize inventories. World rice stocks at the close of 2024/25 marketing seasons are now pegged at 206.0 million tonnes, up 3.5 percent from their already record opening levels and 1.2 million tonnes more than forecast in September.

FAO’s latest forecast for world trade in cereals in 2024/25 has been raised by 2.5 million tonnes to 488.1 million tonnes, but still pointing to a contraction of 2.7 percent (13.8 million tonnes) from the 2023/24 level. World wheat trade (July/June) is forecast to decline by 4.1 percent (8.6 million tonnes) in 2024/25 below the 2023/24 level to 198.4 million tonnes, down 1.0 million tonnes from last month’s forecast mostly due to a downgrade in the European Union’s export forecast (attributed to tighter domestic supplies) and slightly smaller purchases by Egypt and several other countries. By contrast, the forecast for world trade in coarse grains in 2024/25 has been lifted by 2.5 million tonnes this month. An increase in global maize trade is underpinned by expectations of stronger import demand from the European Union on account of reduced production estimates, with larger exports seen for Brazil. Higher import demand from China (mainland) for barley and sorghum is anticipated to be met by sales from Australia and the United States of America, respectively. Despite this month’s upward revision, global trade in coarse grains is still seen declining by 3.0 percent (7.4 million tonnes) in 2024/25 (July/June), to 235.4 million tonnes, almost exclusively reflecting a 3.8 percent decline in global maize trade. International trade in rice is still predicted to decline to 52.1 million tonnes in 2024 (January-December), but it could recover by 4.1 percent in 2025 to reach 54.3 million tonnes. An upturn in imports by countries located in the Asian Near East and in Africa is expected to spearhead the trade recovery anticipated for 2025.

Tags: China, stocks, Egypt, Argentina, corn, FAO, grain, crop forecast, barley, Brazil, EU, rice, wheat, Australia, India, Ukraine, USA