• Slightly above-average cereal production forecast in 2021
• Total cereal exports forecast above average in 2021/22
• Export prices of wheat declined in June 2021 following improved production prospects
Slightly above‑average cereal production forecast in 2021
Harvesting of the 2021 winter cereal crops, mostly wheat and barley, is ongoing, while planting of the 2021 spring crops, mainly wheat and maize to be harvested from August, finalized in June.
Colder and drier‑than‑average weather conditions in March and April 2021 caused winterkill in some snow‑free areas of the key winter wheat producing Southern District. Abundant rainfall in May and early June increased soil moisture levels across most crop lands, benefitting yields of winter crops and promoting planting activities of spring cereals.
The total area planted with wheat, including winter and spring crops, is estimated at 29.9 million hectares and the aggregate 2021 wheat output is officially forecast at 81 million tonnes, 3 percent above the five‑year average. Barley and maize outputs are expected at above‑average levels of about 20 million and 15 million tonnes, respectively, due to large plantings.
As a result, the total 2021 cereal production is forecast at about 125 million tonnes, 4 percent above the five‑year average.
Total cereal exports forecast above average in 2021/22
A floating export duty system for wheat, maize and barley has been in force since 2 June 2021, replacing the system of flat export duties enacted in late January 2021 (FPMA Food Policy) . In addition, on 30 April 2021, a ban on buckwheat exports was introduced for the period between 5 June to 31 August 2021 (FPMA Food Policy). These measures aim to guarantee adequate availabilities of basic foodstuffs in the domestic market and prevent price increases.
However, owing to strong demand from importing countries and the expectation of a large wheat output in 2021, wheat shipments, accounting on average for 80 percent of the total cereal exports, are early forecast at 38 million tonnes, well above the average level. Maize and barley exports are foreseen at slightly above‑average levels of 4.5 and 5 million tonnes, respectively. As a result, aggregate cereal exports in the 2021/22 marketing year (July/June) are forecast at about 48 million tonnes, 6 percent above the five‑year average volume.
Export prices of wheat declined in June 2021 following improved production prospects
Export prices of milling wheat decreased by about 10 percent between February and April 2021, mainly due to a weakening of demand by importing countries. Prices then increased by 7 percent in May, reflecting concerns over the impact of dry weather conditions on the 2021 wheat production in the country as well as in the United States of America and Europe, that put upward pressure on international prices. Finally, prices declined again in June, mainly due to improved production prospects for domestic wheat, but remained about 26 percent higher than a year earlier.
Domestic wholesale prices of milling wheat declined between December 2020 and April 2021, and then increased slightly in the following two months, reaching, in June, levels of about 5 percent above their values a year before.