World Grain - November 2023 - 22

Global grain
trade review
Black Sea supplies keeping wheat prices down
by Chris Lyddon
D
espite the war in Ukraine and the blockade of the
Black Sea, it is supplies from Ukraine and Russia
that are keeping world wheat prices down, while
maize and other coarse grains have turned higher, amid
slow farmer selling in South American producers.
The United Nations Food and Agriculture Organization's
(FAO) latest Food Price Index, covering September, was
published on Oct. 6. It shows average global grain prices
up 1% month-on-month, but 14.6% below their September
2022 level. A 5.3% increase in international coarse grain
prices drove the overall rise for the sector and was itself
driven by a 7% increase in maize prices in September, after
seven months of falls. The rise for maize was " driven
by a confluence of factors, including strong demand for
Brazil's supplies, slower farmer selling in Argentina and
increased barge freight rates due to low water levels on the
Mississippi River, " the FAO said.
The FAO blamed the 1.6% month-on-month fall in
wheat prices on " ample supplies in the Russian Federation,
where production prospects were lifted in September. "
The FAO also raised its forecast for global cereal production
in 2023 by 3.8 million tonnes from the previous
forecast, bringing it to 2.819 billion, up 0.9%, or 26.5 million
tonnes, from the 2022 crop.
" The improved outlook reflects better wheat production
prospects, with the forecast for the world outturn revised
22
upward by 3.7 million tonnes in September to 785 million
tonnes, " the FAO said. " The upgrade in prospects is
almost entirely based on recent and more positive yield
estimates from the Russian Federation and Ukraine compared
to earlier expectations, owing to continued favorable
weather conditions.
" These upward revisions offset a steep cut to the
forecast for Canada's wheat output due to extensive
and persisting dry weather in the key producing states
of Alberta and Saskatchewan, leading to lower overall
yield expectations. Similarly, wheat production forecasts
for Argentina and Kazakhstan were scaled back, as prolonged
dry and hot weather has degraded crop conditions
and led to a trimming of yield forecasts. "
The FAO's forecast for world coarse grains production,
at 1.511 million tonnes, is virtually unchanged from the
previous forecast and is a 2.7%, or 39.2-million-tonne, increase
from the previous year.
" The forecast for global maize production was raised
slightly this month, driven almost entirely by improved
prospects in Brazil, reflecting the latest area and yield
estimates from the ongoing main crop (safrinha) harvest, "
the FAO said. " Brazil is experiencing conducive
overall weather conditions this year, underpinning the
excellent prospects, with production seen reaching a
record high in 2023. "
November 2023 / World Grain / World-Grain.com
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World Grain - November 2023

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