We are here publishing the IGC’s five-year global supply and demand projections which are being released to the public in full for the first time this year. Key points include:
- World total grains output is expected to decline slightly in 2014/15, from the record level forecast for the current season, but then to rise by an average of 1.6% p.a. over the remainder of the five-year period, exceeding 2 billion tons by 2016/17.
- While some area expansion is anticipated, particularly in the major exporters such as the CIS and Brazil, the increase is largely driven by improving productivity.
- Firm demand growth is also expected and, while the absolute level of stocks is likely to rise, the ratio of stocks to use is projected to fall slightly to 18% by the end of the 2018/19, from 20% forecast for 2013/14.
- The projections indicate a marked increase in trade volumes over the five years, as increased demand is met by production growth in the key exporters, most notably in South America and the Black Sea region.
In this article, the IGC wheat projections.
Wheat
While global output is forecast to edge higher over the five years to 2018/19, gains will continue to be contained by competition for land from other crops and by only slow growth in average yields. The projected rise in output broadly keeps pace with a steady expansion in use. Higher demand will mostly come from increasing consumption for human food, mainly tied to growing populations in developing countries in Asia and Africa. Feed use is projected to increase too, but use for industrial purposes is expected to remain comparatively small.
With supply and demand expected to maintain a broad equilibrium in the five years to 2018/19, world stocks are forecast to show little overall change. A modest net increase in the eight major exporters is partly offset by assumed declines elsewhere, including in India. The ratio of world stocks to use is projected to tighten slightly.
Production
Generally favourable autumn planting conditions and a weak outlook for the global maize market helped boost sowings for 2014/15 crops in the northern hemisphere, particularly in the US and EU. Overall, the global wheat area is forecast up 1.2% y/y, including a 7% recovery in the US, following an aboveaverage rate of abandonment the previous year. Tight supplies and high local prices are forecast to lift planted area in Argentina, but harvested area in Canada may recede from the high level of the preceding year.
Only a slight gain in the global area is projected for the rest of the projection period, averaging 0.5% p.a., restricted by competition for available land from other crops, especially maize and oilseeds. Any increase in wheat sowing will likely be concentrated in the Black Sea region, encouraged by good export prospects.
Following a particularly strong recovery in 2013/14, which was aided by beneficial weather, average global yields are expected to drop back slightly in 2014/15 before growing slowly up to 2018/19. World production is forecast to reach 737mt in 2018/19, up 6% from 2013/14.
