The FAO’s biannual report on global food markets was released this month. The report provides an overview of global trends for several main agricultural products, including wheat, coarse grains, rice, oilcrops, meat, and milk and fishery products, as well as a special feature on pulses. The report also provides a country-level review of major policy developments for grains, rice, oilcrops, meat, and dairy.
Global food commodity markets appear broadly stable regarding both supply and price. The report also predicts that market prospects for most commodities remain favorable for 2016-2017. Overall, despite larger import volumes, the world’s food import bill is set to decline by 9 percent in 2016 due to lower international prices compared to last year. These lower prices are likely to contribute positively to global food security, as consumers will have greater access to affordable food.
Global cereal production in 2016 is anticipated to fall slightly short of projected 2016-2017 demand. The report forecasts global 2016 cereal production at around 2,543 million tonnes, 0.6 percent higher than 2015 and only 0.7 percent below the 2014 record.
Global wheat supplies are forecast to remain strong, with total wheat output in 2016 estimated at around 724 million tonnes; this is down just 1.4 percent from the 2015 record. The decline will mostly be due to lower outputs in the EU (6.5 million tonnes), Morocco (5 million tonnes), and Ukraine (4.5 million tonnes). However, wheat production in 2016 is set to outstrip utilization for the fourth consecutive season, boosting world ending stocks to a 15-year high. Global wheat utilization is expected to decline slightly, mostly because of reduced feed use. Overall, with global export availabilities well exceeding the expected import demand, international wheat prices are anticipated to remain broadly stable.
Coarse grain markets, on the other hand, are likely to be subdued during the 2016-2017 season. World production of coarse grains is currently forecast to increase by 1.6 percent, mainly due to favorable prospects for maize, which should compensate for a negative production outlook for sorghum and barley from the United States, Morocco, and Argentina. This increase in global maize output will be mainly concentrated in Europe and the United States; these regions will offset reduced maize harvests in Africa, Asia, and South America. Additionally, international trade in coarse grains is forecast to contract by 3.9 percent, with maize volumes decreasing by only 1.1 percent. More drastic declines of 9 percent and 27 percent, respectively, are expected for trade in barley and sorghum, largely because of reduced projected import demands in China stemming from that country’s decision to lower its coarse grain reserves.
Global rice production is only predicted to make a 1 percent recovery to 494.4 million tonnes after erratic weather conditions led to a poor 2015 crop. World rice inventories are expected to fall by 3 percent in 2016-2017, to 163.8 million tonnes; this will be the second consecutive season of declines. International rice prices have also been declining steadily, falling in October 2015 to their lowest levels since January 2008. Rice prices have now shown indications of stabilizing, however.
Similarly, due to El Niño-related weather conditions, global production of oilcrops and oilseeds are expected to contract in 2016. Global output of palm oil, the world’s leading vegetable oil, is also expected to shrink for the first time in 18 years, after prolonged El Niño-related dryness hit palm plantations across Southeast Asia. Global utilization of oils is expected to expand in 2016. This means that world production is estimated to fall short of consumption, leading to a reduction in global ending stocks.
Global meat production is anticipated to stagnate in 2016, rising by a mere 0.3 percent to 320.7 million tonnes. Increases in output are expected in the United States, Brazil, the EU, India, and the Russian Federation, while reduced production is foreseen for China, Australia, and South Africa. Global meat trade is forecast to recover in 2016, growing by 2.8 percent to 30.6 million tonnes.
World milk production is forecast to grow by 1.6 percent to 816 million tonnes in 2016. Output is set to expand in Europe, Asia, and the Americas but is anticipated to stagnate or decline in Africa and Oceania. Since reaching a peak at the beginning of 2014, international dairy prices have fallen steeply over the past two years. During the first part of 2016, export availability was generally in excess of demand, resulting in the accumulation of stocks of some dairy products in several exporting countries. Low prevailing international prices for dairy products are expected to revive world demand.
The report’s special feature highlights that pulses can have an important role in the 2030 Agenda for Sustainable Development. Grown and eaten worldwide, pulses offer an important and affordable source of protein in human diets. They are also rich in energy, dietary fiber, micronutrients such as vitamin B, and a variety of anti-oxidants. Pulses also possess the unique ability to enrich the soil in which they grow through nitrogen fixation. Due to pulses’ potential for sustainable agriculture and human nutrition , 2016 has been labelled as the International Year of Pulses.
Since the early 1960s, global pulse production has increased by about 1 percent per annum, reaching 73 million tonnes in 2011–13. Almost 50 percent of the world’s pulse output is concentrated in Asia. Pulses have also become increasingly traded; the international pulse trade has grown by 5.5 percent per annum since 1961, reaching a volume of 13.6 million tonnes in 2011–13.