Commodities Buzz: IGC Lifts Global Grains Production Estimate, Highlights Uncertanity Due To Russia-Ukraine Conflict

21 Mar 2022 , 12:04 PM

The International Grains Council (IGC) stated in a latest monthly update that due to an increase for maize (Ukraine, India and the EU), the forecast for world 2021/22 total grains (wheat and coarse grains) production is lifted by 3 million (m) tonnes (t) m/m or month-on-month, to 2,284m. Black Sea export disruptions and higher prices are projected to lead to some demand rationing. Consumption is therefore forecast 8m t lower than before, while the global trade figure (Jul/Jun) is cut by 9m, to 415m. Mainly reflecting an anticipated build-up of inventories in Ukraine, cumulative world ending stocks (aggregate of respective local marketing years) are now seen larger y/y (year-on-year). With much hinging on developments in the Black Sea region, supply and demand projections for 2022/23 are unusually tentative. Including an increase for China’s imports, the 2022 (Jan/Dec) trade outlook is lifted by 1m t m/m and would be steady y/y. Tied to gains in India and other key producers, global acreage is projected at a peak in 2022/23.

With Russia and Ukraine among the worlds largest exporters of grains and oilseeds (and products), the ongoing conflict and resulting spike in agricultural commodity prices has fuelled concerns about potential food security risks, especially in import-dependent countries in Near East Asia and Africa. Given the fluid situation, the Councils supply and demand projections are especially tentative and are subject to significant uncertainty.

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