Sharp Decline Forecast for World Cereal Stocks; Ethanol Demand a Contributor
19 July 2006
|Global cereal production and consumption. Click to enlarge.|
World cereal end-of-season stocks are expected to decline 10% in 2006, due to a slight 1% decrease in global cereal output and growth in utilization, according to the latest forecast of the UN Food and Agriculture Organization (FAO).
Increased demand is expected to be driven by a recovery in feed use due to a rebound in poultry consumption. In addition, the growing demand for ethanol is likely to boost industrial use of coarse grains, particularly maize, especially in the United States and in China.
Course grain production is expected to drop 1.3% while utilization increases 2.8%. Coarse grain stocks are projected to decrease 20.3%.
While down about 1% from 2005 levels, world cereal production for 2006, forecast at 2,020 million tonnes, would still be the third highest on record and above the five-year average, the report said.
International prices of most cereals remained firm or rose further in recent months, supported by strong demand and tighter supply prospects, FAO said in its latest Crop Prospects and Food Situation report.
Many countries are experiencing severe food difficulties and require external assistance, however, despite what the report called a ”generally satisfactory global food outlook.”
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