Home

News 199 views last update:6 Aug 2012

World wheat stocks threatened

The world wheat market is seeing increased volatility and world wheat stocks are so low this season, that any shortfall could threaten supplies, according to Keith Davis, Managing Director of Glencore Grain UK Ltd.

World wheat stocks currently stand at 121mt, the lowest since 1981/82. The world wheat stocks-to-use ratio currently stands at 20%, the lowest ever. The world market is adjusting to these low stocks, but this is coming with increased volatility, he said. Furthermore, world wheat production in 2006/07 will be short of 600mt.
In the 2006/07 season, the world coarse grain stocks-to-use ratio stands at 11.76%, the lowest on record – due in part to part to the meteoric rise in demand from the bioethanol sector.

Looking forward to the 2007/08 season, Davis said that world coarse grain production would rise to around 624mt, but this is just a preliminary forecast, he warned, and fluctuations could be as much as 47mt either side of this estimate.

Maize demand to rise
Meanwhile, demand for maize will also continue to rise, as will plantings, he said, quoting USDA figures which point to a three-fold increase in US maize use for ethanol production. Mandatory targets for renewable fuel use will maintain this in the future, he said, adding that while he believes that the 10% target for renewable fuels is sustainable in the long term, he doubts any increased percentage would be. Over the next few years, the US will 'reactivate' around 1.86m hectares to accommodate a rise in coarse grain plantings, he said. The EU will likely abolish compulsory set-aside, freeing an estimated 3.7m ha, Davis said. Furthermore, the EU reforms of the sugar regime is expected to free a further 650,000 hectares for grain output. Russia could also become a significant player on world grain markets, should all the available agricultural land be pressed into service, he said.

To receive the AllAboutFeed newsletter click here.


Editor AllAboutFeed

Or register to be able to comment.