With many major food producing countries experiencing a decline in cereal production in 2018, there are fears that the world could face a looming shortage of key food commodities. That fear is misplaced, however, due to the large volume of food commodities that have been stockpiled over the past five years. While most of those supplies are located in China, which is unlikely to release them to the global market, there will still be ample food stocks available to meet global demand in the near term. Looking further ahead, however, a second consecutive year of poor growing conditions could result in food shortages in import-dependent markets, such as Indonesia and Egypt.

Key points:

• For the first time in five years, global cereal stockpiles are expected to decline as a result of poor growing conditions in major cereal-producing regions.
• Suggestions that the current situation, wherein the utilisation of cereal crops exceeds annual production, will lead to a global food crisis are premature. A similar situation occurred in 2012-13, which encouraged increased production in following years.
• Record cereal stockpiles, which have consistently increased over the past five years, will prevent a global food crisis from occurring, at least in the short term.
• In the long term, a second consecutive year of adverse growing conditions could see an increase in global food insecurity. Increased production in the Black Sea region and rising commodity prices, however, are likely to avert a global food crisis.