The International Grain Council (IGC), in releasing its global supply and demand projections through 2018-19, says growth in global demand will at least keep pace with growth in production to result in stocks-to-use ratios very similar to current levels.
Specifically, the report states, “While some area expansion is anticipated, particularly in the major exporters such as the CIS and Brazil, the increase is largely driven by improving productivity. Firm demand growth is also expected and, while the absolute level of stocks is likely to rise, the ratio of stocks-to-use (for world total grains) is projected to fall slightly to 18% by the end of the 2018-19, from 20% forecast for 2013-14. The projections indicate a marked increase in trade volumes over the five years, as increased demand is met by production growth in the key exporters, most notably in South America and the Black Sea region.”
Key points from the report:
- World total grains output is expected to decline slightly in 2014-15, from the record level forecast for the current season, but then to rise by an average of 1.6% p.a. over the remainder of the five-year period, exceeding 2 billion tons by 2016-17.
- While some area expansion is anticipated, particularly in the major exporters such as the CIS and Brazil, the increase is largely driven by improving productivity.
- Firm demand growth is also expected and, while the absolute level of stocks is likely to rise, the ratio of stocks to use is projected to fall slightly to 18% by the end of the 2018-19, from 20% forecast for 2013-14.
- The projections indicate a marked increase in trade volumes over the five years, as increased demand is met by production growth in the key exporters, most notably in South America and the Black Sea region.
- Rice output and demand growth are expected to be closely matched, at an average of 0.8% and 1.0% respectively.
- Overall, world rice stocks should remain comfortable, but the stock-to-use ratio is forecast to decline slightly, to 21% from 23% forecast for the end of 2013-14.
- Rice trade is projected to expand further, led by increased deliveries to Far East Asia and sub-Saharan Africa.
- Soybean and rapeseed/canola production growth is expected to outpace grains and rice, against a background of strong demand from the crushing industry; combined output growth is projected at an average of 2.1% p.a. in the medium term.
- Oilseed stocks should recover, but the market is likely to remain relatively tight, with the stock-to-use ratio is seen rising only slightly, to 12%, from 10% anticipated for the end of 2013-14.
