by PressUSDA: world wheat stocks will decline in 2023-2024 MY
World wheat stocks to hit 8-year low
The USDA has published a forecast for the 2023-2024 marketing season for the agricultural market. According to the document, global wheat stocks will fall to their lowest level in the last eight years. The cereal’s reserves will likely be 265.6 million tonnes, the lowest since the 2015-2016 season. The 2019-2020 season saw record reserves of almost 298 million tonnes. Despite the decline, global reserves have not reached the historic low of 2007-2008. Then the stocks amounted to just over 129 million tonnes.
The main factor behind the lower forecasts was unfavourable weather conditions during the ripening period of the crop. As a result, the yields of major producers have been declining steadily for four years. Argentina, the European Union, the United States, Canada and other countries have faced drought at various times.
Since the last report, the USDA forecast has been lowered by 4.3m tonnes. Because of lower production in China, the EU and Canada.
In addition to stocks, analysts expect wheat consumption to fall to 796 million tonnes. Expert Chaslau Koniukh considers the results due to the following:
— reduced use of the crop for feed production and demand for grain waste in the EU;
— in China, wheat-based food consumption and industrial use are likely to decline;
— need for seed should also fall in the PRC.
According to the USDA, Canada and the US will reduce export shipments, bringing world grain trade down to 209.4 million tonnes.
Cereal production forecast
The FAO has released a cereal production forecast for the 2023-2024 season. According to this, the harvest will increase by 1% to 2.81 million tonnes, including rice in flour equivalent. The increase will be mainly due to maize. But rice and sorghum production will also be on the rise. As indicated earlier, wheat and barley production will decline.
Cereal consumption in the current season will be 2.8 million tonnes. It’s 0.9% higher than in 2022-2023. The increase is due to higher consumption of coarse grains.
Despite the decline in wheat stocks, total cereal reserves will increase by 1.7% to 873 million tonnes. The increase is expected due to good forecasts for rice and barley.
Cereal trade will be around 472 million tonnes, in line with the previous marketing year. Higher demand for coarse grains will offset the decline in wheat.
Wheat prices started to fall in May 2023. But analysts attribute this to a stabilisation of the market after a sharp rise in 2022.