(Finance) – The first prospects for the world cereal production in 2022 indicate a probable decrease, the first in four years, to 2,784 million tons, down by 16 million tons compared to the estimated record production for 2021. This is what emerges from the latest report by the United Nations Food Organization and Agriculture (FAO), on the supply and demand of cereals, released today. Expected in consumption also decreased.
The largest decline is expected for maize, followed by wheat and rice, while barley and sorghum production is likely to increase. The forecasts are based on the conditions of the crops already in the ground and on the planting intentions for those still to be sown. World cereal use is also expected to decrease marginally in 2022/23, by about 0.1% from 2021/22 to 2,788 million tonnes, marking the first contraction in 20 years. The decline is mainly due to the decreases expected in the use of grain feed, coarse cereals and rice, while an increase in the global food consumption of cereals is expected, in step with the trend of the world population.
World trade in cereals is projected to decline 2.6% from the 2021/22 level to 463 million tonnes, a three-year low, although the outlook for international rice trade remains positive. The new forecasts also indicate a decline in stocks, with the result that the ratio of grain stocks to consumption dropped to 29.6% in 2022/23 from 30.5% in 2021/2022. This new level would be the lowest in nine years, but still well above the low of 21.4% recorded in 2007/08. Decreasing corn stocks are expected to drive the decline, while corn stocks are expected to increase.
In May, the FAO index of international food prices fell for vegetable oils and dairy products, while it rose for wheat, rice and poultry meat. World food commodity prices as a whole fell slightly in May for the second consecutive month, the United Nations Food and Agriculture Organization reported today. The FAO food price index reached an average of 157.4 points in May 2022, down 0.6% compared to April. The index, which tracks the monthly changes in international prices of a basket of commonly traded food commodities, remained 22.8% higher than in May 2021.
The FAO Cereal Price Index increased by 2.2% compared to the previous month, driven by wheat prices, which increased by 5.6% compared to April and by 56.2% compared to the corresponding value of the previous year. International wheat prices, on average just 11% below the record set in March 2008, rose in response to an export ban announced by India and concerns over crop conditions in several major exporting countries. as well as the reduced production prospects in Ukraine due to the war.