Miller Magazine Issue: 126 June 2020

44 NEWS MILLER / JUNE 2020 FAO: Global food markets still brace for uncertainty in 2020/21 because of COVID-19 The Food Outlook report provides the first forecasts for production and market trends in 2020-2021 for the world's most traded food commodities - cereals, oilc- rops, meat, dairy, fish and sugar. "The impacts of the COVID-19 pandemic have been felt - at varying deg- rees - across all food sectors assessed by FAO. Whilst COVID-19 has posed a serious threat to food security, overall, our analysis shows that from the global pers- pective, agricultural commodity markets are proving to be more resilient to the pandemic than many other sectors. That said, owing to the size of the challenge and the enormous uncertainties associated with it, the international community must remain vigilant and ready to react, if and when necessary," said Boubaker Ben-Bel- hassen, Director of the FAO Trade and Markets Division. CEREALS In spite of uncertainties posed by the pandemic, FAO’s first forecasts for the 2020/21 season point to a comfortable cereal supply and demand situation. Early prospects suggest global cereal production in 2020 sur- passing the previous year’s record by 2.6 percent. Based on conditions of crops already in the ground, planting expectations for those still to be sown, and assuming normal weather for the remainder of the season, world cereal output is forecast at 2.780 million tonnes (inclu- ding rice in milled equivalent), nearly 70 million tonnes higher than in 2019, setting a new record high. After stagnating in 2019/20, world cereal utilization in 2020/21 is tentatively forecast to expand by 1.6 per- cent (43 million tonnes) year-on-year to reach an all-ti- me high of 2.732 million tonnes. The projected growth would mainly mirror a more robust expansion foreseen in feed use relative to 2019/20, although both food and industrial uses are also forecast to increase. Based on FAO’s first forecasts for production in 2020 and consumption in 2020/21, world cereal inventories by the end of national marketing seasons in 2021 are forecast to reach a new record of 927 million tonnes, an increase of 5.0 percent (44 million tonnes) from their already high opening levels. The expected increase in cereal stocks would result in a slight rise in the global cereal stock-touse ratio, from 32.5 percent in 2019/20 to 32.9 percent in 2020/21, indicating a generally com- fortable supply situation when compared to the 21.2 percent low registered in 2007/08. Of the total cereal stocks, as much as 47 percent are expected to be held in China, where national stocks could increase for the second consecutive season and reach a new high of at least 439 million tonnes. FAO’s first forecast for world cereal trade in 2020/21 Food markets will face many more months of uncertainty due to COVID-19, but the agri- food sector is likely to show more resilience to the pandemic crisis than other sectors, ac- cording to a new report released by the Food and Agriculture Organization of the United Nations (FAO).