Drought in Australia, Europe and Russia, three of the great wheat growers of the world, will result in the first decline in global wheat production in six years, said the International Grains Council. The London-based IGC says the large downturn in wheat will add momentum to a drop-off in grain production worldwide that began last year.
Wheat output will fall by a sharp 5.5 percent during the current crop year, said the IGC in its monthly Grain Market Report, outweighing a record-large rice crop and steady corn production. At the same time, ever-growing demand for grain by foodmakers, livestock feeders and industrial processors will eat more rapidly into the so-called carryover stocks that are often used as a gauge of the relative abundance of supplies. The “total grains” carryover is forecast to fall by 11 percent during 2018/19, a startling change. But the world still would have a three-month supply on hand when the new crop year begins, a comfortable cushion.
With production waning, the IGC says grain inventories of the major exporting countries – Argentina, Australia, Canada, the European Union, Kazakhstan, Russia, Ukraine and the United States – will fall to the lowest level in four years.
Wheat supplies are much tighter than suggested by global figures, said Reuters, adding that China accounts for nearly half the problem and is not likely to release any wheat onto global markets. “Experts predict that by the end of the season, the eight major exporters will be left with 20 percent of world stocks – just 26 days of cover – down from one-third a decade ago.”