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Global wheat output may dip sharply

Our Bureau

MUMBAI, July 1

AFTER several years of sustained high production, wheat output in 2001-02 is likely to dip sharply and for the fourth consecutive year, consumption is expected to exceed production, leading to a sharp drawdown of global stocks.

World wheat production for 2001-02 is forecast at 570 million tonnes (mt), 12 mt below the output of the previous year, according to supply-demand estimates worked out by the London-based International Grains Council (IGC). Compared with the last season, the largest declines in production will occur in the EC, the US, India and Turkey. These will be only partly offset by expectation of higher output in Hungary, Romania, Russia, Ukraine, Argentina and North Africa.

World consumption is forecast by IGC to rise by 5 mt to 599 mt mostly as a result of increasing food use in developing countries. Feed use is forecast to decline in the EC as large supplies of domestic maize and imports of manioc displace wheat in compou nd feeds. The attraction of wheat as a protein source in place of meat-and-bonemeal is likely to diminish due to enhanced availability of soyabeans at competitive prices, IGC said. In the US, large new crop supplies of maize and sorghum will constrain fe ed use of wheat.

Global wheat trade may rise by 2 mt to 103 mt in 2001-02. Based on current production prospects, aggregate availabilities in the five major exporters will decline by some 17 mt The group's exports are likely to drop by 1.5 mt Continuing drought will main tain Iran's import requirements at a high level, and China could make significant purchases of higher quality wheat, IGC observed.

Following deterioration in production prospects in China, world wheat stocks may decline to a recent low of 117 mt as compared with 146 mt of the previous year. Aggregate stocks with five major exporters are projected at 37 mt, the smallest since 1996-97 .

Within this group, most of the decrease will occur in the US, but significant declines are also forecast for Canada and the EC. In India, the Government is considering introduction of measures to encourage producers to retain grain on-farm, to ease the b uild-up in official stocks, IGC reported.

Coarse Grains: World coarse cereals production is slated to recover from the previous year by 24 mt to reach 889 mt Although large harvests are in prospect in several countries, the major increases are expected in Europe and China. Despite drought repor ted in China, output should be higher than last season. Canada and South Africa are also likely to see significant upturns in production. In the US, a smaller corn (maize) crop will be partially offset by a rise in output of sorghum.

World coarse grains consumption in 2001-02 is placed at a new high of 901 mt (888 mt). Total feed use in the US is expected to decrease in response to a cyclical decline in cattle numbers, and output of poultry and pork is projected to rise only modestl y. In the EC, demand for maize for starch production should remain firm, and in Poland feed use of most coarse grains is forecast to increase.

World coarse cereals trade is placed 103 mt (106 mt). Global demand for maize will decline as major producers such as Brazil and Canada cut back their import needs. Trade in barley is also likely to decrease and the market will be very competitive with larger export availabilities in the CIS and Easter Europe, the IGC forecast. Because of a smaller outturn of maize in China a temporary suspension of maize exports was announced earlier this week.