(Businessweek) – Global production of grain may be bigger than estimated a month ago as prospects improved for crops from Canada to China to the European Union, the United Nations’ Food & Agriculture Organization said.
Total output of grains, including wheat, rice, corn and barley, will be 2.498 billion metric tons in the 2013-14 season, 0.3 percent more than forecast in October, the Rome-based FAO said in a report today. The global wheat harvest will be a record 708.5 million tons, up from 704.6 million tons estimated a month ago and 7.4 percent more than last year.
Supplies of grain are rebounding globally as growing areas in the U.S., eastern Europe and the former Soviet Union recover from dry weather last year. China, the second-biggest corn consumer, will reap 222.4 million tons of coarse grains, up 3.6 percent from last year. Wheat output in Canada, the third biggest exporter, will be a record 33.2 million tons, according to the FAO.
The improved outlook is “mostly reflecting upward adjustments to production estimates in Canada, China, EU, the United States and Ukraine,” the FAO said. “The sharp increase in 2013 cereal production mostly stems from a recovery of maize crops in the United States” and wheat output in the former Soviet Union, it said.
Wheat on the Chicago Board of Trade, the global benchmark, has tumbled 16 percent this year. Corn futures plunged 40 percent, making the grain the worst-performing commodity so far in 2013 on the Standard & Poor’s GSCI gauge of 24 raw materials. The U.S. Department of Agriculture is scheduled to update its estimates for domestic and world grain supplies tomorrow.
Import Bill
Rising supplies of grain mean the world’s food-import bill will drop to $1.15 trillion in 2013, or 3.2 percent less than a year earlier, the FAO said. The total was higher than the $1.09 trillion estimated in June. In a separate report today, the FAO said global food prices rose in October for the first time in six months, led by a jump in sugar costs.
World inventories of all grain may be 563.7 million tons at the end of the 2013-14 season, including 166.7 million tons of wheat. Both estimates were higher than forecast a month ago. Global trade in grains may rise to 314.4 million tons, 1.7 percent more than the previous season.
