The price of rice will increase in 2017, while soybeans will recover from drought to drive growth in the wider oilseed category, according to the latest insights from Informa Agribusiness.
Global rice production will exceed this year’s output by 9 million tonnes, and good weather conditions means supplies are marginally larger going into 2017 than at the beginning of 2016. Growth in consumption is expected to outpace the increase in supplies, which could lead to increased wholesale prices, Informa warned.
Global wheat output likely will increase by about 3 million tonnes in 2016/17, driven by increased production from the US and Russia, while total usage is expected to increase by about 20 million tonnes. Total production and consumption will even out at around 720 million tonnes. Global stocks for 2017 will be 4 million tonnes larger than in the prior year and ending stocks are expected to rise again by the end of the marketing year, Informa said.
It also predicted that the oilseeds category would recover from drought in South America this year; global soybean output is forecast to rise by about 8% to just over 330 million tonnes by the end of the 2016/17 global marketing year.
Total world oilseed production (including palm, rapeseed and peanuts) is expected to rebound by about 6% by the end of 2016/17.
Don Riffe, senior vice-president for Informa Economics IEG, said: “Across the globe production of grains and oilseeds are on the rise, but market segmentation and quality issues in specific regions is creating an uncertain outlook for producers and traders worldwide. It also remains unclear how the election of Trump will affect the import and export of commodities in the US market, while the potential for a hard or soft Brexit has introduced more speculation in the European market.
“The agricultural industry should prepare for moderate growth in grains and oilseeds, but stakeholders should arm themselves with up-to-the-hour information to better handle sudden geopolitical changes, weather events or other market factors outside of their control.”
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