The Hindu Business Line : Wheat demand, supply seen in balance

GLOBAL wheat demand and supply is likely to be in balance in 2004 following a recovery in global production. Export supplies are expected to be in a position to meet foreseen import demand. As a result, wheat prices in most markets have softened in the recent weeks.

On current reckoning, world wheat output this year is estimated at a record 602 million tonnes (mt), 49 mt more than in 2003, while consumption during 2004-05 (marketing year July-June) is projected at 601 mt (588 mt), the London-based International Grains Council (IGC) said in its latest report.

Compared with 2003-04, more wheat will be used for feed in Europe and the CIS, while food use will increase in Far East Asia. World wheat trade has been forecast at 99 mt, one mt less than in 2003-04. Smaller imports by the EU-25 and Ukraine will be balanced by stronger demand from Far-East Asia, where China is now forecast to buy 7 mt, IGC pointed out.

World wheat stocks at the end of 2004-05 are projected to be 130 mt (128 mt), but stocks with major exporters, especially EU should increase.

Coarse grains: In its first assessment of world coarse grains prospects for 2004-05, IGC forecast total production at 928 mt, up 24 mt, while consumption is projected at a record 941 mt (937 mt).

Feed use will increase marginally, but industrial use will be sharply higher, the report said. World coarse grains trade is set to fall by 4 mt to 100 mt as better crops in Europe would reduce local import needs and purchases by other regions may be held back due to high prices.

In particular, global maize (corn) production is forecast at 638 mt, 23 mt more than in 2003. Higher output is projected for the US and EU-25 as well as for Argentina and South Africa. World maize consumption is forecast 10 mt up to 652 mt in 2004-05.