Concerns about global food security remain rife as the declining global production of cereal crops in 2012 continues to threaten supplies in 2012/2013.
From the erratic monsoons sweeping across South Asia to the dry spells raging across the Americas and the civil unrest in the Near East, crop forecasts have been threatened by a multitude of events and a significant slashing of world inventories is reportedly in the works.
At the levels currently forecasted, the global production of essential cereals such as wheat, rice, maize and other various coarse grains is set to decline a further 2.6 percent from last year, according to FAOs October Issue of Crop Prospects and Food Situation report.
Consequently, the forecasted global utilisation at 2.3 billion tons will leave the world cereal stocks at the close of 2013 at 499 million tones- nearly five percent lower than the years opening levels.
FAOs crop outlook for wheat production in 2012 stands at 663 million tons, 5.2 percent below last years level, but close to the average of the past five years. However, reports regarding the wheat plantations in 2013 have predominantly been positive. With current wheat prices much higher than they were at the time of plantation last year and utilisation set to outstrip production once again, wheat continues to remain an attractive option for prospective producers.
Among other cereals, the outlook for global rice production in 2012 has been predominantly stable over the year. However forecasts have been deteriorated significantly over the past four months, passing from FAOs estimates of 490.5 million tons in June to the current 483.5 million tons on a milled basis.
Much of the scaling down has been on the back of yield cuts in Bangladesh, India and Pakistan, mainly as a consequence of the erratic progress of the monsoon rains. However, production figures from Brazil, where the 2012 crop was harvested earlier this year, have also seen some downgrading. Overall, FAOs current anticipation of the global rice production continues to hover around the 485 million ton mark as of October.
On the whole -stemming mainly from a 5.2 percent reduction in global wheat and a 2.3 percent reduction in coarse grain yields this year- declining supplies have tightened world cereal prices significantly, and currently the FAO Cereal price index reflects a seven percent hike over the same period last year. And the tighter prices are naturally going to cue an immediate increase in concerns over the welfare of the countries requiring external assistance for food in the coming months.
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