Miller Magazine Issue: 118 October 2019

58 COVER STORY MILLER / OCTOBER 2019 countries in Asia and Africa. Following earlier extraordinary growth, world industrial demand is now expanding by a more moderate 2% per year. Production of maize-based biofuels and starch is expected to increase once more in 2019/20, with the strongest gains in China and South America. With US ethanol processors struggling with thin profit margins and lacklustre demand, authorities are reportedly con- sidering a new support package, rumoured to include higher biofuel blending mandates. More generally, un- certainty has increased about global economic pros- pects in recent months and with growth expectations generally softening, this could yet temper demand for industrial products. Despite a potentially bumper crop and prospects for sub-par demand growth, world carryover stocks (aggre- gate of respective local marketing years) are forecast to decline for a third successive season, seen 26m t lower y/y, at 601m t. The tightening is almost entirely linked to a further drawdown in maize stocks, estimated at a six-season low and seen outweighing build-ups of wheat (to a record) and barley (to a 10-year high). The drop in maize inventories primarily reflects a sustained contraction in Chinese stockpiles, as that country con- tinues to work through supplies built up earlier in the decade. Exporter stocks, seen as potentially a better proxy of market supplies, are forecast to be down very slightly from the season before but broadly in line with the recent average. Underpinned by sustained increases in demand for animal proteins, wheat-based foods and starch prod- ucts, world grains trade (basis July/June) is projected to reach unprecedented levels in 2019/20, seen rising by 1% y/y, to 370m t, including 172m t of wheat (+2% y/y), 165m t of maize (unchanged) and 27m t of barley (+8%). By region, Asia is the top destination, account- ing for around half of world imports, followed by Africa