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Wheat demand-supply seen stable next year: IGC

Our Bureau

MUMBAI, April 30

WORLD wheat supply and demand conditions are unlikely to undergo major changes during 2001-02, going by the outlook for wheat announced by the London-based International Grains Council (IGC). However, weather over the next three months could play a criti cal role in shaping the crop.

The forecast for world wheat production is 579 million tonnes (mt), despite declines expected in the EC, the US and North Africa. Global consumption for 2001-02 is forecast at 600 mt. Most of the increase of 7 mt from the previous year will occur in food use in developing countries, while a rise of 4 mt in industrialised countries is attributable to higher feed use, IGC said.

Based on current crop prospects, world wheat trade is forecast to rise by one million tonnes to 104 mt. While some further expansion is expected in Asian markets, notably Indonesia, China's requirements will be particularly significant for total import g rowth.

Output declines in the EC and the US are likely to be largely buffered by stock draw-downs. Larger harvests projected for Argentina and Australia should boost their export availabilities. World stocks are projected by the IGC at 94 mt at the end of 2001- 02 which would be 22 mt below the estimate for the current year. Stocks in the five major exporting countries could decline by 10 mt to 37 mt, the lowest since 1996-97.

Coarse grains: At this early stage, world coarse grains production in 2001 is forecast at 883 mt, 16 mt higher than in 2000. Barely output is projected to rise slightly to 135 mt. Larger crops are expected in Canada and North Africa, but output will decl ine in the EC and Russia.

The outturn of maize (corn) is forecast to increase by 13 mt to 599 mt. Lower output in Brazil and the US is expected to be offset by larger crops in the EC, Romania, China and South Africa.

IGC has emphasised that sowing is not yet completed in major growing regions and that the initial forecasts assume normal conditions throughout the growing season. Planting progress is slightly behind average in the US where there is concern over possibl e flooding in some parts of the corn belt. Wet weather also severely hampered sowing of spring barley in parts of the EC.

For the current year 2000-01, the IGC has estimated world wheat production at 580 mt (585 mt); consumption at 593 mt (591 mt); world trade at 103 ml.t (108 mt); and stocks at 116 mt (129 mt).

As for world coarse grains, production estimate for 2000-01 is 867 mt (893 mt); consumption at 885 mt (884 mt); trade at 106 mt (105 mt) and stocks 138 mt (156 mt).

Conflicting views about wheat prices are doing the rounds of the market. Some traders hold a bearish view of the market given the large stocks still with major exporters, while others indicate the vulnerability of the market to abnormal weather patterns, particularly in the US.