Miller Magazine Issue: 134 February 2021

83 MARKET ANALYSIS MILLER / february 2021 the outlook for world maize supply and demand remains relatively tight. In part, this reflects a predicted continued balance-sheet tightening in China, where above-average imports are foreseen throughout the period in order to prevent an even greater contraction of reserves. In com- parison, world balance sheets for other grains stay relati- vely comfortable, with further wheat stock accumulation projected to new peaks, and only minor changes over the baseline for other grains. As indicated in the report world grains trade is seen expanding by an average of 2% annually, led by higher shipments of wheat and maize. While annual increases are expected to be slower than in recent years, rising feed needs will continue to drive growth in maize shipments, with China a regular buyer of sizeable volumes. Expanding milling wheat imports account for much of the growth in wheat trade. Here is the IGG’s possible supply and demand scenario for the major grains for the five years to 2025/26: WHEAT OUTLOOK TO 2025/26 Buoyed mainly by increases in yields, global wheat pro- duction is forecast to climb to record highs across the out- look period. World consumption is projected to grow by about 2% annually, including gains for both food and feed, but little change for industrial uses. A sustained accumula- tion of world stocks is predicted to successive record, but much of the accumulation continues to be in China. Only a modest stock recovery is foreseen in the major exporters, while some drawdown is forecast in India. Further trade growth is projected, led by higher imports in Far East Asia and Africa. Russia remains the largest exporter. Production While COVID-19 related restrictions on labour movement complicated wheat planting and har- vesting in some countries, 2020/21 fieldwork generally progressed normally, especially in the highly-mechanised key exporters. Initial concer- ns about possible shortages of key farm inputs, including seeds and fertilisers, were also largely unrealised, with global supply chains functioning relatively efficiently. After gains in the prior two seasons, world harvested area is forecast to decline in 2021/22, albeit staying at an-above average level. The re- duction is mainly tied to an expected reduction in India, following a very sharp increase in the previ- ous year, but with a drop also foreseen in Russia, where there is a risk of higher than average win- terkill losses following sustained dry weather. From 2022/23, global area is predicted to edge higher, but with acreage curbed by likely strong competition from other crops, including maize and soyabeans. Amid envisaged strong profitabi- lity, wheat area in Russia is projected to trend slightly hig- her, mainly for better-yielding winter varieties. A steadier outlook is seen for the EU-27, but with sowings predicted to remain larger than average across the forecast period given unresolved concerns about the rising costs of rapese- ed/canola cultivation. Growth in average yields is expected to be the main dri- ver of production in the five years to 2025/26. Assuming more seasonal cropping weather, especially in Europe, Uk- raine and North Africa, yields are forecast to rebound quite sharply in 2021/22. Thereafter, gradual improvements in productivity are envisaged, including across the Black Sea region and Argentina. In the period between 2022/23 and 2025/26, annual average growth in world yields is pegged at just above 1%, somewhat faster compared to the recent average, but broadly similar to the long term trend. Global outturns are projected to reach consecutive re- cord highs during the next five seasons. With the strongest net production gains seen in Argentina, Ukraine and the EU, global output in 2025/26 is placed at 822m t, up by 57m compared to 2020/21. Assuming sustained levels of government support for food grains, wheat acreage in Chi- na is projected to remain high over the next five years whi- ch, combined with steady productivity gains, could see that country overtaking the EU as the world’s largest grower towards the end of the forecast period. Consumption World wheat consumption appears to have held-up well in most countries during the pandemic. While many count- ries temporarily closed hospitality sectors and imposed stay-at-home orders, strong consumer demand for foods Source: IGC Global grain supply and demand