The Food and Agriculture Organization of the United Nations (FAO) has projected that global cereal stocks will reach an unprecedented 897 million tonnes for the 2024/25 season, a 1.5% increase from their opening levels. This projection highlights a period of significant stability in the global cereal market.
Global cereal production is anticipated to reach 2,846 million tonnes, maintaining levels close to the record output achieved in the 2023/24 season. This steady production is expected despite potential adverse weather conditions in the Black Sea region, which may impact wheat yields. However, these potential disruptions are not yet reflected in the current forecasts.
The FAO’s latest Cereal Supply and Demand Brief indicates an increase in the inventories of maize, barley, sorghum, and rice, while wheat stocks are expected to decline. The global stocks-to-use ratio is projected to remain stable at 30.9%, suggesting a balanced relationship between supply and demand.
Increasing Utilization and Trade Dynamics
Total cereal utilization is expected to grow by 0.5% to a new high of 2,851 million tonnes in 2024/25, driven primarily by increased food consumption of rice.
In contrast, global trade in cereals is forecasted to decline by 1.3% to 481 million tonnes, mainly due to lower trade prospects for maize. Nonetheless, international rice trade is predicted to expand significantly, reflecting strong global demand.
Market Implications
The FAO’s projections indicate a stable and resilient global cereal market, with ample supplies to meet global demand. However, stakeholders should be aware of potential risks, such as weather-related production challenges in key regions like the Black Sea.
For consumers, the steady supply of cereals, especially rice, suggests continued availability and potentially stable prices. For farmers and producers, these insights from the FAO provide valuable guidance for strategic planning in crop production and resource management.
Overall, the FAO’s forecasts offer a comprehensive overview of the global cereal market’s current state and future prospects, aiding policymakers, traders, and stakeholders in making informed decisions in the coming months.
Photo source: Google
By: Montel Kamau
Serrari Financial Analyst
10th June, 2024
