Cereals - OECD-FAO Agricultural Outlook 2013-2022


Relatively low stock-to-use ratios raise concerns about the vulnerability of global cereal markets, but production is expected to increase 1.4% per year with 57% of the total growth coming from developing countries.


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Market situation

Supply and demand balances of major cereals were tight in the 2012 marketing year, with global production of wheat and coarse grains falling short of global utilisation, and pulling down stocks. Severe droughts in 2012 in the United States and across a large part of Europe and into central Asia have been the main cause of the reduced wheat and coarse grains crops.

For 2013, world wheat production is expected to record the second largest crop after that of 2011. The increase is mainly driven by an expansion in area in response to high prices and an expected recovery in yields from below-average levels in 2012 in some countries, notably the Russian Federation, Kazakhstan and Ukraine. By contrast, the outlook in the United States is less favourable as severe drought conditions during the early stages of the growing season in the Southern Plains reduced winter survival rates and yields in affected areas.

Early prospects for world coarse grains production in 2013 are favourable as the production of maize in the United States, the world’s largest maize producer is likely to surpass pre-drought levels with recovery in yields and early indications suggesting the largest planned maize area since 1936.

Rice supplies in 2012 were sufficient to allow for a continued rebuilding of stocks. India emerged as the world’s leading rice exporter in 2011 through the release of significant stocks built up over the previous four years of export restrictions and reduced competition from Thailand, where exporter’s competitive edge had been eroded by the government high producer price policies. In the near future, Thailand is expected to increase rice exports and recover its world leading position.

Projection highlights

  • World grains prices could remain under downward pressure in the short-term and continue to ease in real terms over the outlook period following a slower than expected economic recovery of the world. Crude oil prices slightly grow in real terms over the Outlook period and this could weigh on grain markets.

  • Wheat and coarse grains yields are estimated to increase by about 12% on average between the base year and 2022. In terms of area expansion, coarse grains are projected to experience a faster growth than wheat or rice.

  • Short-term supply and demand imbalances (as measured in terms of changes in stocks) are solved within the first few years of the outlook but stock-to-use and stock-to-disappearance ratios remain well below historical averages over the baseline. This raises serious concerns about the vulnerability of cereal markets to unexpected shocks, especially from the supply side (e.g. severe drought episodes in major producing regions).

  • The additional demand for biofuel feedstocks over the projection period (mainly maize) is driving the large expansion of coarse grains in developed countries. In developing countries, the main driver is the feed demand for livestock production.

  • Exports of wheat, coarse grains and rice are set to increase over the projection period with new Asian rice exporters expected to make major inroads.