FAO warns of further shortages in world cereal markets as demand remains high in 2020/21

The United Nations Food and Agriculture Organization (FAO) has revised its forecast for 2020 world cereal production up by 1.7 million tonnes to 2.767 million tonnes, a 2.1% increase from 2019. This adjustment is primarily due to revisions in coarse grain production projections in several African countries. However, a slight reduction in the forecast for world rice production was necessary due to reported lower production in Guinea and the Democratic People's Republic of Korea.

The FAO has also increased its forecast for global cereal utilization in 2020/21 by 6.0 million tonnes, reaching 2,783 million tonnes, which is a 2.7% increase from the previous year. This growth is largely attributed to a significant revision in the maize utilization forecast, with China and the United States being the primary contributors.

Despite the increase in utilization, the FAO has lowered its forecast for global cereal reserves at the end of the 2021 seasons by 2.8 million tonnes to 805 million tonnes, marking a 2.3% decrease from previous levels. This is largely due to an anticipated reduction in corn stocks in China and the United States.

Finally, the FAO expects that global cereal trade in 2020/21 will reach 467 million tonnes, marking a 5.9% year-on-year increase, with trade in coarse grains expected to surge by 9.2% due to significant purchases of corn and barley by China.