The world’s total grain (wheat and coarse grain) supply in 2016-2017 and 2017-2018 will cross 2.5 billion mt amid record harvest and high carryover stocks, according to a report released by the International Grain Council.

Despite a 3% drop in 2017-2018 production and strong projected demand resulting in a lower estimated carryover, stocks are expected to reach the second highest level of more than 2.5 billion mt for the second consecutive year, IGC said.

Wheat production in 2017-2018 is forecast at 735 million mt, down 2.52% from the 2016-2017 estimate.

Meanwhile, wheat carryover is estimated at 513 million mt in 2016-2017, up 5 million mt from the volume forecast a month ago. In 2017-2018, wheat stocks are estimated at 484 million mt, down 5.65% from the latest estimates for 2016-2017.

In terms of demand, wheat consumption by the food sector is expected to remain robust, up 1.35% at 502.9 million mt in 2017-2018.

India is expected to reduce imports from 5.1 million mt in 2016-2017 (April-May) to 2 million mt in 2017-2018 amid expectations of higher local production.

The world’s second-largest wheat producer, India is expected to produce 95.5 million mt of wheat in 2017-2018, up 11% from last season, on higher acreage and expectations of improved weather compared with previous two season.

Feed sector, on the other hand, is expected to contract 3.16% at 147.3 million mt in 2017-2018, according to the IGC.

Source: Platts