FAO Updates 2022-23 Cereal Production Forecast, Despite Year-on-Year Decline

The Food and Agriculture Organization (FAO) of the United Nations has updated its forecast for world cereal production in 2022-23 by 9 million tons this month, reaching 2,774 million tons. Rice output has been particularly revised upwards due to more favourable weather conditions in India. 

Tanzania and Pakistan are expected to face output reductions due to poor rains and severe floods, respectively. Overall, cereal utilization is forecasted to fall by 0.6 % below the 2021-22 level, primarily driven by a decline in the utilization of major coarse grains such as maize, barley, and sorghum. Despite the expected drawdowns of global coarse grain and rice stocks, the world cereal stocks-to-use ratio is still comfortable. World cereals trade in 2022-23 is forecasted to fall by 1.8 % below the 2021-22 level to 473 million tons, mainly driven by a decline in global barley and sorghum trade.

Upward Revision 

The upward revision mainly concerns rice and coarse grains, reflecting the incorporation of recently released official figures. Particularly, rice output has been revised upwards due to more favourable weather conditions in India.

Cereal Utilization

Overall, cereal utilization is forecasted to fall by 0.6 % below the 2021-22 level. This decline is primarily driven by a contraction in the utilization of major coarse grains such as maize, barley, and sorghum. The utilization of rice is expected to remain marginally below the 2021-22 all-time high. In contrast, the forecast of global wheat utilization has been revised upwards, reflecting a greater feed use of wheat in the European Union due to tighter domestic maize supply and higher wheat supply levels.

Cereal Stocks-to-use Ratio

Despite the expected drawdowns of global coarse grain and rice stocks, the world cereal stocks-to-use ratio is still comfortable. At 29.5 %, it is down from 30.7 % in 2021/22 but indicates an overall comfortable supply level.

World Cereals Trade

World trade in cereals in 2022-23 is forecasted to fall by 1.8 % below the 2021-22 level to 473 million tons, primarily driven by a decline in global barley and sorghum trade. In contrast, the world wheat trade in 2022-23 (July/June) is set to increase by 1.1 % above the 2021 level.

Insight 

FAO’s latest forecast for world cereal production in 2022 has been revised upwards, mainly reflecting better than expected weather conditions in India. However, overall cereal utilization is expected to decline, mainly driven by a contraction in the utilization of major coarse grains.

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