Mumbai: In line with expectation, world wheat production in 2008-09 is forecast to expand 7 per cent to register a new high while dwindling stocks are set to show an upturn as forecast production is likely to exceed forecast consumption by a good margin.
No wonder, the world wheat market has taken cognisance of this positive development as a result of which forward prices have begun to ease rapidly. On the Chicago Board of Trade, wheat futures prices have collapsed given generally improved supply prospect. Speculators have begun to rapidly liquidate their long position.
In its latest grain market report, the London-based International Grains Council (IGC) has forecast global wheat production in 2008-09 at a record 645 million tonnes (mt), up 41 mt from the previous year. This could well be one of the biggest yearly increases in production in recent years.
Consumption, on the other hand, is projected to rise to 630 mt (611mt) because of anticipated increase in food and feed demand encouraged by lower prices. World stocks, according to IGC, may recover to 128 mt (114 mt). Inventory with five major exporting countries is set to rise by 10 mt to 37 mt.
Indian wheat harvest is in full swing and market arrivals are heavy. According to the Agriculture Ministry, the crop size has set a new record of 76.8 mt.
Procurement by the governmental parastatal Food Corporation of India is at a steady pace, raising hopes of meeting and possibly exceeding the 15 million tons target. This has sent a clear signal to the world market that India may not be a buyer of wheat – not until six months from now, in any case.
Theoretically, India can become a wheat exporter this year as there will be price parity. However, given the price sensitivity and political compulsions, wheat export ban is most unlikely to be lifted.
As for maize (corn), world output is likely to trail consumption for the fourth year in a row. Stocks would be further drawn down. IGC has forecast world maize output in 2008-09 at 762 mt (775 mt) and consumption at a new high of 784 mt (774 mt).
While feed demand is expected to stay strong, high maize prices may lead to substitution by other grains and high protein feeds. Continued robust demand for ethanol in the US would mean as much as 20 mt of more corn would be diverted as biofuel feedstock.
No wonder, the world wheat market has taken cognisance of this positive development as a result of which forward prices have begun to ease rapidly. On the Chicago Board of Trade, wheat futures prices have collapsed given generally improved supply prospect. Speculators have begun to rapidly liquidate their long position.
In its latest grain market report, the London-based International Grains Council (IGC) has forecast global wheat production in 2008-09 at a record 645 million tonnes (mt), up 41 mt from the previous year. This could well be one of the biggest yearly increases in production in recent years.
Consumption, on the other hand, is projected to rise to 630 mt (611mt) because of anticipated increase in food and feed demand encouraged by lower prices. World stocks, according to IGC, may recover to 128 mt (114 mt). Inventory with five major exporting countries is set to rise by 10 mt to 37 mt.
Indian wheat harvest is in full swing and market arrivals are heavy. According to the Agriculture Ministry, the crop size has set a new record of 76.8 mt.
Procurement by the governmental parastatal Food Corporation of India is at a steady pace, raising hopes of meeting and possibly exceeding the 15 million tons target. This has sent a clear signal to the world market that India may not be a buyer of wheat – not until six months from now, in any case.
Theoretically, India can become a wheat exporter this year as there will be price parity. However, given the price sensitivity and political compulsions, wheat export ban is most unlikely to be lifted.
As for maize (corn), world output is likely to trail consumption for the fourth year in a row. Stocks would be further drawn down. IGC has forecast world maize output in 2008-09 at 762 mt (775 mt) and consumption at a new high of 784 mt (774 mt).
While feed demand is expected to stay strong, high maize prices may lead to substitution by other grains and high protein feeds. Continued robust demand for ethanol in the US would mean as much as 20 mt of more corn would be diverted as biofuel feedstock.
No comments:
Post a Comment