Wheat farmers around the world are forecast to reap a crop of 723 million tonnes this year, down 10 million tonnes, or 1.4 percent, from the record harvest of 2015, said the UN Food and Agriculture Organization in its first forecast of 2016 crops.
“The projected decrease would be mostly on account of reductions in winter plantings in the Russian Federation and Ukraine, largely driven by dry-weather conditions,” said FAO in its Cereal Supply and Demand Brief. “On the other hand, more favorable growing conditions are anticipated to sustain near-record harvests in China and Pakistan, while helping production to recover in India. In the United States, early prospects put production at just below the 2015 level, as higher yields are expected to make up for reduced winter plantings.”
The FAO forecast calls for the third-largest wheat crop ever, trailing 733 million tonnes in 2015/16 and 729 million tonnes in 2014/15. It would keep supplies at high levels. Some 205 million tonnes of wheat will be in storage when the 2016 crop is ready for harvest, equal to three-and-a-half months of use. At its Outlook Forum, the USDA projected a U.S. wheat crop of 1.99 billion bushels this year, down 3 percent from 2015, but the U.S. carry-over would remain at a six-month supply.
FAO’s Food Price Index held steady in February and is 14.5-percent lower than a year ago. Sugar prices fell 6.2 percent during the month due to prospects for a larger crop in Brazil while vegetable oil prices soared 8 percent, to the highest level since last June. The outlook for palm oil production worsened in Southeast Asia.