Page 23 - Food Outlook

of wheat for animal feed, more than offsetting anticipated reductions in Canada and the United States, where supplies are expected to be reduced because of lower production.
By contrast, total other uses of wheat (which includes industrial use, seeds and post-harvest losses) is set to remain close to the previous season’s level, at around
97 million tonnes. Based on derived estimates from recent reports of the International Grains Council, total wheat used for industrial production in 2017/18 could reach
23 million tonnes, just slightly higher than in 2016/17. Starch manufacturing, which represents the primary industrial use of wheat, is forecast to hover around 12 million tonnes, marginally above the 2016/17 estimated level. Total wheat use for the production of biofuels (excluding non-fuel uses) is also seen to remain stable, at just below 9 million tonnes.
STOCKS
Wheat inventories to increase further, boosted by large supplies in China
Global wheat stocks are forecast to reach
258 million tonnes by the close of seasons in 2018, an all- time high and 13 million tonnes, or 5 percent, above their opening levels. However, this forecast is 3 million tonnes below the previous FAO forecast published in October, with most of the downward revision in the Russian Federation. World wheat inventories have increased continuously
since 2013/14, as growth in global production has exceeded expansion in total world utilization. Based on the current prospects, the world wheat stock-to-use ratio in 2017/18 would reach a high of 34.4 percent,
up slightly from the previous season. However, the ratio of major wheat exporters’ closing stocks to their total disappearance (defined as domestic utilization plus exports), which is considered to be a better measure of availability in global markets, is set to decrease to 17.4 percent in 2017/18 from 18.7 percent in 2016/17. This slight decrease reflects a cut in the total end-season inventory level held by the major exporting countries
to 70 million tonnes, down 5 million tonnes from
their opening levels. Most of the decline is expected
in Australia, Canada and the United States, due to reduced production levels, and in the EU, reflecting higher utilization and exports. By contrast, following this year’s record output in the Russian Federation, the country’s end-season wheat inventories are set to reach 15 million tonnes, up 5 million tonnes from their revised opening levels but 2.6 million tonnes below the October forecast, mostly on account of an expected increase in domestic use.
Figure 6. Wheat stocks and ratios
million tonnes
320 240 160
80
0 2013/14
2014/15
2015/16
China
2016/17
estim.
percent
40 30 20 10
2017/18 0
f’cast
Rest of the World
Major Exporters
World Stock-to-use ratio Stock-to-disappearance ratio of major exporters
Overall, the bulk of this season’s projected expansion
in world wheat reserves is expected to take place in
China, where wheat inventories are forecast to increase
by at least 18 million tonnes, or 20 percent, to around
110 million tonnes. After a decade of relative stability in the level of wheat stocks in China, within the range of 50 to
55 million tonnes, inventories started to rise sharply from 2015/16, boosted by the increase in domestic production. At the current forecast level, wheat stocks held in China would represent some 43 percent of the world total.
FOOD OUTLOOK NOVEMBER 2017
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WHEAT