FAO's latest forecast for global cereal production in 2003 and the first forecast for utilization in 2003/04 indicate that output will remain below the expected level of utilization and stocks will have to be drawn down again in 2004 for the fourth consecutive year.
FAO's forecast for global cereal output in 2003 has been revised upward to 1 914 million tonnes, some 4 percent up from the previous year's below-average level. Growth in wheat output will be less than expected in the previous report but the forecasts for coarse grains and rice have risen.
World cereal utilization in 2003/04 is forecast to increase by about 1.4 percent to 1 981 million tonnes. Cereal food consumption is likely to keep pace with population growth and feed use is expected to increase modestly, mainly on the expectation of a strong production rebound in several developed countries.
FAO's first forecast of global trade in cereals in 2003/04 stands at 231 million tonnes, some 8 million tonnes down from the estimated volume in 2002/03. Trade in nearly all major cereals is expected to decrease with the most significant decline projected for wheat.
International prices for most cereals have firmed in the past two months, but the outlook for the coming months is mixed. While wheat markets could weaken, maize prices are expected to remain mostly stable, while rice prices could increase.
Global cassava production is forecast to increase in 2003 and trade could also expand. International cassava prices have continued strengthening, reflecting buoyant demand in China.
The slow-down in price growth observed in the oilseed complex in recent months is expected to be short-lived; the fundamentals for the season as a whole suggest that the growth in global supplies is expected to fall short of the anticipated rise in global demand, thus inducing prices to strengthen further.
Global production of pulses in 2003 is forecast to grow by 2 percent from last year, with expected sharp increases in some major exporting countries. This is anticipated to exert downward pressure on the prices of most tradable pulses towards the end of the year.
Several record late-season sugar crops have led to larger global output in 2002/03 than earlier expected and may keep prices under downward pressure in the near term.