Early 2003/04 Prospects
- Monday, December 9, 2002
This analysis featured in the December 9, 2002 issue of the HGCA's MI Prospect, Volume 5, Number 12
Key points
The publication of the International Grain Council(IGC) first projection of world wheat production for 2003 provides a very early basis for evaluating the supply and demand situation for next season. While a projection made at this stage is highly tentative and will certainly be subject to minor and quite possibly major adjustment over the next 12 months, it does provide an equally tentative basis for assessing market prospects.
The IGC currently projects world wheat production for next year at 597 million tonnes, up 35M tonnes from this year's drought reduced level and fourM tonnes, less than one percent, above this year's projected consumption(see table). Major increases in output are projected for the US and Canada, with both larger seeded areas and recovery from drought reduced yields. Further Australian and Argentina's output is expected to increase with yield recovery. A smaller wheat crop is projected for Russia following difficult seeding conditions this autumn.
continueWorld Wheat Production, 2001 to 2003 ==================================== million tonnes 2001 2002 2003 est. proj. Tradional Exporters EU 90.6 102.5 102.3 USA 53.3 44.0 60.0 Canada 20.6 15.5 24.0 Australia 24.0 10.0 23.0 Argentina 15.3 13.3 15.5 ----------------------------------- Total 203.8 185.3 224.8 % of Grand Total 35% 33% 38% Other Major producers China 94.0 89.0 92.0 India 68.8 71.5 70.0 Russia 46.9 49.5 42.0 Pakistan 19.1 19.5 20.0 Ukraine 20.2 20.0 19.0 Turkey 15.5 17.5 17.0 Kazakhstan 12.7 12.8 13.0 ----------------------------------- Total 277.2 279.8 273.0 % of Grand Total 48% 50% 46% Others Total 97.7 97.2 98.7 % of Grand Total 17% 17% 17% Grand Total 578.7 562.3 596.5 ------------------------------------- Source; International Grains Council, November 2002
Elsewhere changes are relatively minor. Projected output from the EU, China and India are the three largest wheat producers producing over half world wheat output. Their 2003 production is projected to decline by less than one percent.
A recovery in output from the traditional exporters as projected would, following the 2003 harvest, likely result in more normal market conditions.
These early IGC estimates come with a clear health warning that both yields and planted area can still be significantly influenced by weather and economic conditions. For instance Southern Hemisphere 2002 wheat crops are only just being harvested at present. Indeed the initial estimate of world production back in January 2002 was 597M tonnes. Subsequently , the drought conditions discussed earlier reduced the crop by over 30M tonnes.
World maize and coarse grain production will also influence wheat prices. At present , the only thing that is clear about supply prospects for 2003/04 in coarse grain markets is that opening stocks will be reduced significantly by stock use this season to make up for below trend US maize crop of 2002.
David Walker
phone: 01603 705153
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