Cereal production in the EU will fall by 2.5% compared to 2021 due to the drought

BRUSSELS, 7 Jul. (EUROPA PRESS) -

Cereal production projections in the community market for this year are lower than expected and are 2.5% below 2021 levels due to extraordinarily dry weather conditions in several regions, according to of the report on the perspectives of the agricultural markets, published this Thursday by the European Commission.

The document indicates that the total production of cereals in the EU will reach 286.4 million tons, 2.5% less than the previous season. In parallel, the demand for animal feed and cereals to produce biofuels is expected to decrease by 1.3% and 3%, respectively.

In addition, the text points out that world agricultural prices have rebounded by 30% since the Russian military invasion of Ukraine, despite the fact that some relaxation is noted in the markets linked to the next harvest.

In a further step, the report shows that the EU has relatively high grain reserves and forecasts that EU grain exports will increase by 14% compared to 2021, which could partially offset the reduction in exports. caused by the blockade of Ukraine's seaports and export restrictions.

The document highlights that current reserves will help meet consumption needs in the EU and part of export demand, which is expected to remain high due to pressures in global markets.

In another step, the exception to allow cultivation on fallow land will lead to a 6% increase in the areas of protein crops planted for the 2022-2023 season, according to the document, with 2.2 million hectares.

This increase in production will cause EU protein crops exports to increase by 19% compared to last year.

Farmers took advantage of this exception to also plant sunflowers due to their low demand for water and fertilisers, so the production of sunflower seeds in the EU is expected to reach a maximum of 11.1 million tonnes this year, which represents 7.8% more.

Regarding the animal sector that affects meat and dairy, the report highlights that outbreaks of animal diseases, such as African swine fever, and high food prices represent a challenge for the sector, although it concludes that the availability of food in the EU will not be threatened.

The report reveals that the fallout from Russia's military aggression in Ukraine continues to affect global commodity markets and poses a threat to global food security.

In particular, the Ukrainian agricultural sector is suffering along the entire supply chain, from production to trade, and this has put great pressure on the global supply of grains and oilseeds.

The rise in energy prices and its consequences on the costs of production, transport, heating, fertilizers or raw materials are behind this rise in prices.

In any case, the report points out that the price of basic agricultural products will continue to have an effect on consumer prices and, therefore, consumers are expected to switch from buying higher value products to cheaper ones in order to control spending.