Miller Magazine Issue: 134 February 2021

86 MARKET ANALYSIS MILLER / february 2021 Industrial use to be the fastest increasing component, led by ethanol. Inventories are projected to recede further amid tightening in China, but some stock rebuilding is en- visaged in the main exporters, led by the US. The ex-China stocks-to-use ratio is seen trending higher. Trade is set to grow by 2% per year, to new hi- ghs, chiefly to meet feed needs in developing countries. China is ex- pected to become a regular major buyer. The US may lose some market share, but will remain the largest supplier. Production Sowings for 2021/22 are fore- cast to increase for a third con- secutive season, including gains in Ukraine, Brazil and China. In contrast, given extremely strong competition from soyabeans, US area is projected to be stable next season. Over the remainder of the projection period, maize sowings are predicted to trend higher, with growth seen averaging slightly less than 1% per year, fractionally slower compared to the prior fi- ve-year average. Further expan- sion is predicted in Brazil, where there is the potential for further conversion of pasture land, with the additional area likely to be planted to second (safrinha) crops. Assuming some mar- ginal farmland is returned into maize cropping rotations, there is also potential for a modest increase in seeding in China. However, given sustained restraints on arable land availabilities, sown areas will likely remain below earlier peaks. A strong demand outlook is predicted to underpin US plantings in the coming five years, but with the upside likely curbed by large soyabean acreage. Medium term increases in output are projected to be ma- inly led by productivity gains, with average annual growth of around 1.5% seen similar compared to the previous fi- ve-years. Assuming normal cropping weather, much better results are expected across the Black Sea region and Europe in 2021/22. As trend yields are predicted elsewhere, inclu- ding in the US, average world productivity is seen at a fresh record next season. Thereafter, further gains are expected, with average yields projected at 6.25 t/ha by the end of the outlook period, compared to 5.80 t/ha in 2020/21. Boosted by anticipated gains in both acreage and yiel- ds, larger world crops are projected through to 2025/26. Including solid increases across the major exporters, global output is forecast to reach 1,277m t in five years’ time, 131m more than in the current season, with growth seen averaging slightly more than 2% per annum. Consumption Against the backdrop of widespread COVID-19 vaccina- tions, worldwide economic activity is expected to gradually improve. However, the long-term impact of the pandemic on disposable household incomes and, consequently on meat consumption and feed use, is unclear. Industrial demand re- mains a function of the duration and severity of the virus contain- ment measures. While maize up- take for biofuel improved as social restrictions were rolled back in key users, the most recent wave of lockdowns has dashed hopes for a quick rebound. The eventu- al return to more normal driving patterns will bolster demand for road fuel, but medium-term bio- fuel production trends will hinge on feedstock availability, blending economics and national biofuel mandates. World consumption is projected to reach consecutive peaks du- ring the forecast period, although average annual growth of 1.9% is markedly below the average for the prior five years. The drop reflects expectations for softer growth for food and feed, as well as limitations for ethanol produc- Source: IGC Wheat imports Source: IGC Wheat production in selected countries