FAO Reports Upward Revision of World Cereal Production in 2022
The latest report from the Food and Agriculture Organization (FAO) revealed that the FAO Cereal Price Index decreased by 5.6 percent in March 2023 compared to February 2023. The decline was mainly driven by the drop in international wheat prices by 7.1 percent, as a result of strong competition among exporters and ample global supplies. The global supply outlook was boosted by higher estimates for Australia’s production and better crop conditions in the European Union in April 2023.
International rice prices also declined by 3.2 percent, influenced by ongoing or imminent harvests in major exporting countries such as India, Thailand, and Vietnam. World barley and sorghum prices declined by 6.7 percent and 5.7 percent, respectively, as a spillover from the weakness in international maize and wheat markets.
The report also stated that the world cereal production projection for 2022 has been revised upward to 2,777 million tonnes, although still 1.2 percent lower than in 2021. The forecast for world cereal consumption in 2022/23 is 2,779 million tonnes, a decrease of 1.0 million tonnes since February, indicating a decline of 0.7 percent from 2021/22. The lower anticipated feed use of maize and minor adjustments made for several importing countries due to smaller expected imports accounted for the decrease.
The FAO report also highlighted that world maize prices fell by 4.6 percent in March due to seasonal availability from harvests in South America, expectations of record output in Brazil, and the extension of the Black Sea Grain Initiative.
Overall, the decline in global cereal prices in March 2023 may provide some relief to countries that depend heavily on cereal imports. However, the situation may vary depending on the specific country and cereal in question. The FAO will continue to monitor global cereal markets and provide updated information as necessary.