World trade in cereals in 2012/13 is forecast to reach nearly 303 million tonnes, 5.4 million tonnes more than predicted in February, but 4.5 percent (14.2 million tonnes) less than the record registered in 2011/12. Compared to the previous season, more than half of the expected contraction would be on account of wheat trade (including wheat flour in wheat equivalent), which is forecast at 139.5 million tonnes in 2012/13 (July/June), down 8 million tonnes from 2011/12. This is 3 million tonnes more than previously foreseen, with the revision reflecting higher prospects for exports by India and the EU and larger imports by the Russian Federation and Ukraine.

The expected sharp retreat in wheat imports in 2012/13 reflects reduced purchases by several countries; namely, Afghanistan, Algeria, Egypt, Kenya, Saudi Arabia, Thailand, Turkey and Uzbekistan. On the exporter side, tight supplies are forecast to depress shipments by the Russian Federation, Kazakhstan and Ukraine as well as Argentina, Australia and the EU. Against this backdrop, large wheat exports by India, currently forecast to reach 7.5 million tonnes, have helped in easing the market situation.

This month’s upward revision is mostly on account of much higher maize imports by the EU, which could reach a 5-year high of 9 million tonnes in 2012/13, up 3 million tonnes from the previous season due to lower production and reduced feed wheat supplies in domestic markets. The projected contraction in world trade in 2012/13 reflects anticipated reduced imports by a number of countries, including Brazil, Canada, Egypt, Indonesia, Saudi Arabia, South Africa and Venezuela, more than offsetting larger imports by the EU, Kenya, Ukraine and the United States. An emerging feature in 2012/13 has been the sharp decline in maize exports from the United States (by over 18 million tonnes to 24.5 million tonnes on July/June basis) because of the drought-reduced production in 2012. The decline should be largely compensated by a near three-fold increase in sales by Brazil, to a record 23 million tonnes.