Global trade in cereals in 2022/23 revised down further, forecast for 2023 world wheat production up marginally from last month

FAO’s latest forecast for world cereal production in 2022 has been lifted marginally to 2 777 million tonnes, albeit remaining 1.2 percent lower year-on-year. The latest increase, with almost all of the 2022 crop harvested, reflects minor upward revisions to coarse grain estimates for production in Australia and Ukraine. Global rice production figures have undergone a small (0.6 million tonne) downward revision since March, largely due to official lower estimates of the Indonesian harvest concluded last December. This reduction outweighed an upgrade to output prospects for Cambodia, reflecting a strong pace of plantings during the ongoing dry-season cycle. As a result, world rice production in 2022/23 is now pegged at 516.0 million tonnes (milled basis), down 1.6 percent from the 2021/22 record high, but still an above-average harvest.

The forecast for world cereal utilization in 2022/23 stands at 2 779 million tonnes, down 1.0 million tonnes since the last report and still pointing to a decline of 0.7 percent from the 2021/22 level. Lower anticipated feed use of maize, especially in the European Union as well as minor adjustments made for several importing countries on account of smaller expected imports, is the main driver behind this month’s 1.5-million-tonne downward revision to global coarse grain utilization. Now pegged at 1 479 million tonnes, global coarse grain utilization in 2022/23 is forecast to fall by 1.6 percent below the 2021/22 level. Global wheat utilization is pegged at 780 million tonnes, fractionally up this month, reflecting higher than previously anticipated feed use of wheat in China, and now 0.9 percent above the 2021/22 level. FAO’s forecast for world rice utilization in 2022/23 has changed little since March, pointing to global rice use amounting to 519.9 million tonnes, just 0.3 percent less than the 2021/22 peak.

FAO’s forecast for world cereal stocks by the close of the 2023 seasons has been raised by 5.8 million tonnes, to 850 million tonnes, but still pointing to a decline of 0.3 percent below their opening levels. Based on the latest forecasts, the world cereal stocks-to-use ratio in 2022/23 would stand at 29.7 percent, still indicating an overall comfortable level although down slightly from 30.7 percent in 2021/22. Global coarse grain stocks are still seen heading for a 4.3 percent fall from their opening levels despite a 2.2-million-tonne upward revision this month. Most of this month’s upward revision reflects expectations of higher maize stocks in major maize exporting countries as a result of lower export prospects for Argentina and the United States of America and an upward revision to the production estimate in Ukraine. The forecast for global wheat stocks was also raised this month, by 3.9 million tonnes, further amplifying the anticipated rise above the opening levels to 5.3 percent. Similar to coarse grains, this month’s upward revision to wheat stocks is also concentrated in major exporters, including Australia (due to a higher production estimate), the European Union (official balance revisions), and the Russian Federation (due to lower export expectations). World rice stocks at the close of 2022/23 marketing seasons are forecast at 194.1 million tonnes, 2.4 million tonnes below the 2021/22 record high. This level would be sufficient to cover 4.4 months of prospective global consumption, largely due to prospects of Asian reserves remaining at near-record levels thanks, namely, to expected stock rebuilding in India. Carryover prospects are more downcast for other regions. This would be especially so for Latin America and the Caribbean and Africa, owing to decreased outputs witnessed in South America and Eastern Africa, but also due to reduced import prospects for countries such as Ghana, Ethiopia and Senegal.

Forecast at 469 million tonnes, world trade in cereals in 2022/23 is predicted to fall by 2.7 percent below its 2021/22 level following a 4.1-million-tonne downward revision this month. This revision stems from a 6.1-million-tonne cut to the world coarse grain trade forecast for 2022/23, now pegged at 217 million tonnes, down 6.1 percent from 2021/22. Foreseen smaller maize sales from Argentina and the United States of America, both based on sluggish export pace, outweighed larger than anticipated exports by Brazil. Along with reduced purchases by several countries on the import side, these revisions resulted in a 4.9-million-tonne cut this month to the global maize trade forecast, now pointing to a 3.0 percent decline from the 2021/22 level. Slow sales of sorghum by the United States of America underpinned a 1-million-tonne downward revision to the global sorghum trade forecast, now 36 percent below the 2021/22 level. By contrast, FAO’s global wheat trade forecast for 2022/23 has been raised this month by 1.6 million tonnes, mostly reflecting stronger than previously anticipated demand from China and larger sales by Australia and Kazakhstan, and is set to reach an all-time high of 199 million tonnes, up 1.9 percent from 2021/22. As for world trade in rice in 2023 (January December), improved domestic supply prospects lowered FAO’s forecast for imports by Bangladesh. However, this reduction was outweighed by an upgrade to Indonesia’s import outlook, consistent with the country’s ongoing efforts to reconstitute state stockpiles and ease inflationary pressure. As a result, international trade in rice in 2023 is now forecast at 53.1 million tonnes, 0.5 million tonnes more than predicted in March but still down 5.2 percent from the 2022 record level.

Prospects for 2023 crops

Looking ahead, FAO’s forecast for world wheat production in 2023 has been raised marginally compared to preliminary expectations in March and now stands at 786 million tonnes, which would be the second largest outturn on record and only 1.3 percent below the 2022 level. In the European Union, wheat production is seen increasing moderately year-on-year due to an expansion in plantings and generally good conditions at the start of spring, notwithstanding dryness in parts of Italy, Portugal and Spain. In the Russian Federation, although dry conditions in southwestern parts of the country eased, a decline in winter wheat plantings is expected to constrain production in 2023. In Ukraine, the economic impacts of the war, including low farm-gate prices, dissuaded many farmers from planting wheat. As a result, in addition to pockets of dryness in the southeast, a well below-average wheat harvest is forecast for 2023. In the United States of America, with recent rains providing some relief to dry conditions in key wheat areas of the Central Plains and winter sowings up year-on-year, production is forecast to exceed the drought-reduced outturn in 2022. In Canada, resting on expectations of an upturn in plantings, wheat production in 2023 is projected to increase year-on-year. In Asia, despite heatwaves during March in northern India, the 2023 wheat harvest is forecast to exceed the five-year average underpinned by a near-record sown area and favourable weather until February. Similarly, generally good crop conditions have prevailed in Pakistan and production is anticipated to exceed the five-year average. In Near East Asian countries, following uneven precipitation during the first months of the season, good rains in recent months improved crop conditions, including in Türkiye and Iran (Islamic Republic), both significant producers. In North Africa, rainfall deficits in Algeria, Tunisia and, albeit to a lesser degree, Morocco, are resulting in below-average wheat harvest expectations for 2023, following the already low outturns in 2022.

South of the equator, planting of the main season maize crop is nearly complete in Brazil and the sown area is expected at an all-time high, underpinned by robust export demand. Consequently, and also reflecting conducive weather conditions, maize production is forecast at a record high in 2023. In Argentina, prolonged dry conditions have adversely affected maize crops, eroding production prospects. In South Africa, good yield prospects following beneficial weather point to a year-on-year increase in production, potentially reaching the second highest level on record in 2023.

Summary Tables

Tags: grain, wheat, FAO, crop forecast