FAO experts increased production forecasts in August, but price indices remained almost unchanged

In the August report, UN FAO experts increased the forecast for world grain production in 2025 by 35.6 million tons compared to July estimates to a record 2,961 million tons (+3.5% compared to the previous season's harvest), in particular feed grains - by 36.1 to 1,601 million tons (+5.9% or 88.6 million tons). This is due to increased corn production forecasts in the USA, Brazil and Mexico, both due to the expansion of the sown area and better yields. At the same time, the harvest forecast for the EU was reduced due to drought and a reduction in the sown area.

The forecast for global sorghum production has been raised to 66.6 million tonnes (+5.6% or 2.2 million tonnes compared to 2024) due to a record harvest in Brazil.

The forecast for global wheat production has been reduced to 804.9 million tonnes (+6.9 million tonnes) amid a decrease in harvests in China and Argentina, partially offset by increased production in the EU.

The forecast for global rice production has been raised to a record 555.5 million tonnes (+1%), as reduced harvests in Nepal, Thailand and the US will be offset by increases in Indonesia, India, China and Brazil.

The forecast for world grain consumption has been increased by 21.7 million tonnes compared to July estimates to 2,922 million tonnes (+1.6% or 44.6 million tonnes compared to 2024), in particular feed grains (especially maize and sorghum) – to 1,568 million tonnes (+1.7%), including wheat – to a record 803.5 million tonnes (+8.1 million tonnes), and rice – to 550.6 million tonnes (+1.9%). Corn consumption will increase in Brazil and the US, but decrease in Argentina. Wheat consumption will increase in the EU, China and Thailand, while Saudi Arabia will reduce barley consumption.

The forecast for ending grain stocks in the 2025/26 MY has been increased by 9.6 million tons compared to July estimates to a record 898.7 million tons (+3.7%), in particular, world rice stocks will grow to a record 214.5 million tons (+2%), corn stocks in the US may reach a record 50 million tons, while world wheat stocks will decrease.

The ratio of grain stocks to consumption in the 2025/26 MY will increase by 1% compared to the previous season to 30.6%.

The forecast for world grain trade in 2025/26 MY has been increased compared to July estimates by 6.5 million tons to 493.4 million tons (+1.4% to 2024/25 MY), in particular corn - by 5.1 million tons, wheat - by 7.8 million tons, rice - by 0.6 million tons to 61.4 million tons (+2.9%).

The global food price index was almost unchanged compared to July (130 points) and amounted to 130.1 points, as the increase in prices for meat, sugar and vegetable oils was offset by a decrease in prices for grain and dairy products. The price index exceeded the August 2024 figure by 6.9%, but was 18.8% lower than the record March 2022 figure. Compared to July, the grain price index decreased by 0.8% (-4% compared to August 2024), for dairy products - by 1.3% (+16.2%), while the vegetable oil price index increased by 1.4% to the highest since July 2022, for sugar - by 0.2% (-9%) and for meat - by 0.6% (+4.9%).

Recall that the FAO food price index is a weighted average indicator that tracks the dynamics of world prices for five main groups of goods.