Following a sharp cutback in the forecast for global cereal production in 2003 and combined with the anticipated cereal utilization during the 2003/04 marketing season, the FAO forecast for world cereal stocks has been lowered significantly. World cereal carryover stocks in 2004 are now forecast to drop to 372 million tonnes, down 20 percent from the previous season. As a result, the global stocks-to-use ratio would stand at around 19 percent, compared to nearly 24 percent in 2002/03, pointing to amuch tighter global supply-and-demand situation. While falling inventories in China have been the main factor behind successive cuts in world cereal stocks since 1999, the sharp reduction in carryovers also reflects a notable cut in wheat and coarse grain stocks in Europe, particularly in the EU, the Russian Federation and Ukraine.
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