Global wheat consumption seen outpacing output

The global grain market is likely to witness a very tight supply situation due to second successive fall in world grain output coupled with a further rise in consumption, according to the International Grain Council (IGC) monthly forecast released Friday.

Total global grain output in 2006-07 (July-June) is estimated at 1,557 million tonne, while consumption is seen at 1,623 million tonne, up two tonne from the earlier forecast, IGC said.

The world carryover stocks are seen at 242 million tonne, which are at a 10-year low. IGC's grain-wise projections are as follows: The world wheat output is slightly revised upwards by two million tonne to 587 million tonne from October, still 31 million tonne short from 2005-06 actual output.

The upward revision comes on the back of better-than-expected yields mainly in Russia. Higher prices are curtailing demand in some countries in Africa and Near East Asia, but imports from Brazil and Chile are estimated to go up on lower crop there, IGC said.

The estimated fall in Australian export by 6,00,000 tonne is likely to be offset by more exports from Russia, the report said. Improved prospects in China and Kenya are likely to be more than offset by reduction in crop estimates in the US and the European Union, the international body said.

The global corn output is seen at 688 million tonne, down two million tonne from October estimates, compared to the actual output of 693 million tonne in 2005.

The consumption is expected to remain 721 million tonne, down one million tonne from October forecast, mainly on the rising demand from Pacific Asia's growing poultry and pig meat industries, IGC said.

The international maize trade is estimated to be 81.5 million tonne, up 0.9 million tonne from October forecast due to larger imports by the EU where domestic feed prices are higher.

World stocks are projected at 92 million tonne, down two million tonne from October. US carryover stocks are put at 23.8 million tonne, compared with 51.1 million tonne at the end of 2005-06, the IGC forecast said.

With good sowing conditions in the northern hemisphere, total area is forecast to increase by 4 per cent, reversing last year's fall. Winter wheat acreage in US is expected to grow 8 per cent, while a large increase is expected in wheat acreage in India, IGC said.