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Early Prospects for 2013 Cereal Production are Favourable

Early Prospects for 2013 Cereal Production are Favourable

13 March 2013

GLOBAL - FAO’s latest forecast for world cereal production in 2012 has been revised upward by four million tonnes since the February figure to two 306 million tonnes (including rice in milled terms), but still about two per cent down from the previous year’s record.

The latest revision largely reflects upward adjustments for rice as the 2012 secondary crop harvests in some countries are still ongoing or have just been completed.

FAO’s first forecast for world wheat production in 2013 stands at 690 million tonnes, which would be 4.3 per cent up from the 2012 harvest and the second largest crop on record after that of 2011.

The increase is expected mostly in Europe, driven by an expansion in area in response to high prices, and a recovery in yields from below-average levels in some countries last year, notably the Russian Federation.

Aggregate plantings in the EU are estimated up by 3 per cent and weather conditions have been generally favourable so far.

In the Russian Federation, assuming normal spring conditions, overall wheat area is forecast to expand and yields should recover from last year’s drought-reduced levels. Also in Ukraine, a large recovery in wheat output is anticipated following increased planting and satisfactory weather.

In Asia, prospects for the 2013 wheat crop, to be harvested from April, are mostly favourable in the main producing countries. New record high crops are forecast in China and Pakistan, while India is on course for another bumper harvest, reports the FAO.

By contrast, the outlook in the United States is less favourable as severe drought conditions of the past months in the Southern Plains may reduce winter survival rates and yields in affected areas.

Thus, despite an estimated 1 per cent increase in winter wheat plantings and the likelihood that spring plantings will at least match last year’s level, if not expand slightly, aggregate wheat output is tentatively foreseen to decrease by as much as 6 per cent in 2013.

In the Southern Hemisphere, the major wheat crops will be sown later this year, so the outlook at this stage is very tentative.

 

In Australia, where planting should get underway in April, prospects are uncertain after a summer heat wave, which has depleted soil moisture reserves in some important growing regions.

Prospects for the first 2013 maize crops in South America remain generally favourable. In Brazil, following favourable precipitation, official forecasts point to a 9 per cent increase in production compared to the same season’s output last year.

Planting progress for the second season crop is also satisfactory under the good moisture conditions and the area is expected to increase from last year’s level.

In Argentina, official estimates indicate that maize plantings have fallen some 8 per cent from the record high of 2012. Nevertheless, at the estimated area, a recovery of yields after last year’s drought-reduced level could see production rise to a record high of 25.5 million tonnes.

However, a dry spell from early January through early February may impact negatively on yields of late planted crops if more rains do not arrive soon.

In Southern Africa, the 2013 cereal crops have developed satisfactorily overall in the large producing areas and current indications point to improved yields over last year’s average level, except in Namibia, where rains were below normal.

In South Africa, the subregion’s main producer, 2013 maize production is anticipated to reach near record levels, above 13 million tonnes, if favourable weather persists.

At the current forecast of 489 million tonnes, world rice production in 2012 would be 1 per cent , or 4.3 million tonnes, higher than the revised 2011 estimate, a rather disappointing outcome if compared with the large gains registered in the previous two seasons.

The increase is expected to be mostly concentrated in Asia, where output may reach 443 million tonnes, 4.2 million tonnes more than in 2011.

Meanwhile, several countries located along and south of the equator have already started, or are about to start, collecting their 2013 first crops. Indonesia is targeting a 5 per cent increase in production in the coming season, under the Government expansionary drive.

Sri Lanka is heading towards a 4 per cent area-based increase in output in 2013. Argentina, which will officially open the rice harvest on 8 March, has reported a 2 per cent retrenchment in plantings.

The season is also well advanced in Brazil, where officials are predicting production to rise by 3.7 per cent to about 8 million tonnes, despite a small contraction in the area.

In New South Wales, where much of the Australian rice is grown, production is expected to expand by 15 per cent , to its highest level since 2002, thanks to the availability of abundant irrigation water in reservoirs.

Utilization up marginally, constrained by falling demand for ethanol production

The forecast for world cereal utilization in 2012/13 has been raised slightly (by about 3 million tonnes) since February to 2 330 million tonnes, reflecting small adjustments to the estimates for food and other uses.

At the current forecast level, global cereal utilization would be barely 3.8 million tonnes greater than in 2011/12, sustained mainly by increases in food consumption, now predicted to expand by 14 million tonnes, or 1.3 per cent.

This rate is sufficient to keep per caput food availability stable at 152.8 kg per year for cereals as a whole, with a small decline in wheat to 66.9 kg offset by modest increases in rice and coarse grains to 57 kg and 28.9 kg, respectively.

On the other hand, world utilization of cereals as feed is likely to be only marginally higher than in 2011/12, as a sharp reduction in wheat feed usage from the previous season’s record level is expected to be fully made up by coarse grains.

The tightening of wheat supplies and resulting high prices since mid last year are behind the expected 2 per cent contraction of total wheat utilization in 2012/13, to 683 million tonnes.

Much of this decline would be on account of an 8 per cent reduction in feed utilization from the previous year’s record, a drop that is expected in most countries except in the United States, where feed wheat use could double in 2012/13 and reach a record, mainly in substitution for maize.

Total utilization of coarse grains is forecast to rise by 0.8 per cent to 1 169.7 million tonnes. While world feed use is expected to rebound by 2.4 per cent to a record 649 million tonnes, the anticipated 10 per cent fall in the use of maize for production of fuel ethanol in the United States, which is forecast to fall to 114 million tonnes in 2012/13 from 127 million tonnes in 2011/12, is behind an overall 3.2 per cent contraction in world usage of coarse grains other than food and feed.

World rice consumption in 2012/13 is forecast at 477 million tonnes, 1.6 per cent (7.4 million tonnes) higher than the previous season, underpinned by a rise in human food consumption to 403 million tonnes, or 85 per cent of the total utilization.

 

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