In contrast to the UK, global grain production looks set to increase for the 2020 harvest (2020/21 marketing year). This is the latest forecast from the International Grains Council’s (IGC).
Since April, the total expected grain production has gone up by 12 million tonnes and consumption down by 4 million. These figures might seem small, but global organisations like this will make subtle and gradual changes so as not to have to reduce them again the following month. The summary then is that grain availability is slowly becoming easier than was expected earlier on in the season. As can be seen in the table, this is not the highest stock levels the world has seen for a year or two, but a small change in supply makes a larger difference in price.
18/19 figures estimates; 19/20 forecasts; 20/21 projections Argentina, Australia, Canada, EU, Kazakhstan, Russia, Ukraine, US
What the table does not show is the impact of protectionism. It suggests that there are 2.23 billion tonnes of grain for anybody to buy. Clearly, much of that is locked away in countries that are not engaged with the global market, or where the domestic market mops up the whole domestic crop. However, the recent moves by Governments around the world to ensure their citizens have enough food, and thus preventing export sales is potentially restricting the movement of some grains from, for example, Russia. Russians will not eat more wheat than usual though, meaning any surplus will emerge onto the global market eventually.
The easing of the global grain market places a downwards pressure on prices. This will be felt in the UK and is serving to counter-balance some of the upwards pressure from a small UK harvest.
