Global cereal markets likely to remain comfortable in 2020

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Updated: April 3, 2020 9:08:17 AM

It added that localised disruptions, largely due to logistical issues, pose challenges to food supply chains in some markets and their anticipated duration and magnitude are unlikely to have a significant effect on global food markets.

Global cereal markets, Covid-19, FAO,  global food markets, FAO forecast, European UnionFAO reports that 2019 world cereal production has been revised upward by 1.2 million tonne (MT) this month, and now stands at 2,721 MT, surpassing the 2018 global output by 64.6 MT, or 2.4%.

Global cereal markets are expected to remain comfortable in 2020 despite the threat posed by Covid-19, with only localised disruptions expected due to logistical issues, Food and Agriculture Organisation (FAO) of the United Nations said in a report on Thursday.

It added that localised disruptions, largely due to logistical issues, pose challenges to food supply chains in some markets and their anticipated duration and magnitude are unlikely to have a significant effect on global food markets.

The cereal markets are expected to remain well supplied through 2019-20 due to the near-record wheat production expected in 2020. The UN organisation estimates that ample supplies will eventually help shield food markets from the turmoil of coronavirus storm.

FAO reports that 2019 world cereal production has been revised upward by 1.2 million tonne (MT) this month, and now stands at 2,721 MT, surpassing the 2018 global output by 64.6 MT, or 2.4%. The latest revision rests mostly on raised estimates for maize production in the European Union and the Russian Federation, based on higher-than-previously expected yields. As a result, world production of coarse grains in 2019 now stands at 1,445 MT, which was 36.3 MT higher year-on-year.

The estimate for global wheat production remains unchanged since the previous month at 763 MT, 30.9 MT above the 2018 output and only slightly short of the record 765 MT registered in 2016. There have been only minor adjustments to the global rice production outlook since March, with world output still expected at 512 MT (milled basis), down only 0.5 % from the 2018 high and the second largest volume on record.

Rome-based FAO’s forecast for 2020 world wheat production remains unchanged this month, with preliminary expectations still indicating an output of 763 MT, a comparable level to the outturn in 2019. Lower outputs are expected in the European Union, Ukraine and the United States of America, mostly underpinned by area contractions.

For coarse grains, harvesting of the 2020 crops will soon commence in Southern Hemisphere countries.

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