FAO forecasts bumper cereal harvest in 2021/22 despite poor weather

GLOBAL – The food and agriculture organization (FAO) has projected global cereal production in 2021 to reach 2 821 million tonnes,  a 1.9 percent increase from 2020, led by a foreseen 3.7 percent annual growth in maize output. 

Although a record high, the latest world cereal production has been lowered marginally since the previous report in June majorly due to concerns about coarse grains which FAO expects to be adversely impacted by adverse weather conditions. 

Global maize production is expected to dip due to the prolonged drought period in Brazil which is one of the world’s largest producers of the cereal. 

According to FAO, the declines expected in Brazil more than outweigh upward revisions made to maize production forecasts in China, the Russian Federation, and Ukraine.   

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The world barley production forecast has also been trimmed, owing to a lower production forecast in the European Union, reflecting smaller-than-previously expected plantings 

By contrast, the forecast of global rice production in 2021 has undergone a slight upward adjustment since June, as more buoyant area expectations for Iraq and record reported yield outcomes in Argentina and Uruguay outweigh a downward revision for the European Union 

Overall, Global production of coarse grains is now pegged at 1 513 million tonnes, 3 million tonnes below last month’s expectation.  

World cereal utilization in 2021/22 is predicted to expand by 1.7 percent to 2 826 million tonnes buoyed by an anticipated increase in cereal consumption as food and animal feed. 

Global wheat utilization is arguably one of the biggest drivers of the rise in utilization, rising 2.7% to 780 million tonnes as its price competitiveness relative to maize makes it an ideal feed option. 

World rice utilization in 2021/22 is on the other hand pegged at 520.8 million tonnes, up 1.5 percent from the previous season, keeping the global per capita rice intake firm at close to 54 kilos per person. 

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Based on those forecasts, world cereal stocks at the close of crop seasons in 2021/22 are anticipated to increase by 0.3 percent to 811 million tonnes.   

This would be the first time since 2017/18 that cereal stocks by the close of seasons are forecast to rise above their opening levels although the global stocks-to-use ratio is forecast to decline further to 28.1 percent. 

Maize inventories are the biggest drivers of this month’s upward revision with China leading the way with stocks projected to be up 3.0 million tonnes from their revised opening levels. 

In the June update, FAO projects world trade in cereals in 2021/22 to stand at a record 472 million tonnes, mainly supported by continued large maize purchases from China.

World wheat trade is also expected to contribute to this rise in trade, expanding 2.1% to 189 million tonnes this month due to continued strong demand from several countries in Asia.  

Overall, FAO notes that although feed uses are also seen increasing, an anticipated expansion in food use would account for much of this year’s growth in cereal consumption. 

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