Global economics

World commodity forecast:

Maize

March 2022
Economist Intelligence
20 Cabot Square
London E14 4QW
United Kingdom
EIU
Founded in 1946, EIU forecasts economic trends, political forces and industry developments in every country in
the world. We combine data, analysis and forecasting to guide informed decisions by businesses and policymakers.
We specialise in:
•Country analysis—access detailed country-specific economic and political forecasts, as well as assessments
of the business environments in different markets with EIU Viewpoint;
•Risk analysis—our risk services identify actual and potential threats around the world and help our clients
understand the implications for their organisations. Available products include Country Risk Service and
Risk Briefing;
•Industry analysis—five-year forecasts, analysis of key themes and news analysis for six major industries in
60 economies. These forecasts are based on the latest data and in-depth analysis of industry trends,
available via EIU Viewpoint; and
•Speaker Bureau—book the experts behind the award-winning economic and political forecasts. Our team is
available for presentations and panel moderation, as well as boardroom briefings covering their specialisms.
Explore Custom Briefing for more speaker information.
For further information please contact our customer services team on eiu_enquiries@eiu.com.
London New York Hong Kong
Economist Intelligence Economist Intelligence Economist Intelligence
20 Cabot Square 750 Third Avenue 1301 Cityplaza Four
London 5th Floor 12 Taikoo Wan Road
E14 4QW New York, NY 10017 Taikoo Shing
United Kingdom United States Hong Kong
Tel: + 44.(0) 20 7576 8181 Tel: + 1 212 541 0500 Tel: + 852 2585 3888
Email: london@eiu.com Email: americas@eiu.com Email: asia@eiu.com
Gurgaon Dubai
Economist Intelligence Economist Intelligence
Skootr Spaces, Unit No. 1, PO Box No - 450056
12th Floor, Tower B, Building No. 9 Office No - 1301A
DLF Cyber City, Phase – III Aurora Tower
Gurgaon – 122002 Dubai Media City
Haryana Dubai
India United Arab Emirates
Tel: + 91 124 6409486 Tel: + 971 4 463 147
Email: asia@eiu.com Email: mea@eiu.com

Copyright
© 2022 The Economist Intelligence Unit Limited. All rights reserved. Neither this publication nor
any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means,
electronic, mechanical, by photocopy, recording or otherwise, without the prior permission
of The Economist Intelligence Unit Limited.
All information in this report is verified to the best of the author's and the publisher's ability.
However, EIU does not accept responsibility for any loss arising from reliance on it.

Symbols for tables

“0 or 0.0” means nil or negligible; “n/a” means not available; “–” means not applicable
Maize
Demand
Growth in world feed use will accelerate
in 2021/22
Maize is used in a large number of
industrial applications
World commodity forecast March 2022
1
Maize
Global consumption of maize has almost doubled over the past two decades,
rising by more than 3% per year on average. Growth has increased particularly
strongly in developing countries in Asia, Africa and Latin America, but has also
made solid gains in the US and Europe. Annual global consumption has
exceeded 1bn tonnes since 2015, of which about 60% is used as livestock feed,
almost 30% for industrial processing and the remainder for direct human food
use, seed or is lost in waste. Growth in global demand faltered in 2019/20 and
2020/21, rising at a slower rate than normal, owing partly to the coronavirus
pandemic and associated lockdowns. High prices and strong competition from
other feed grains, including wheat, have also limited maize consumption in
some major users. With economic recovery now under way in most developed
countries, GDP growth is expected to accelerate as immunisation rates continue
to climb. Factoring in projections for gains in feed, ethanol and maize-based
starch consumption, EIU expects world demand to increase by 3% in 2021/22 to
1,180m tonnes, led by China, the US and Brazil, although the pace of recovery
will vary greatly across regions. Demand is forecast to increase further in
2022/23, provisionally pegged at 1,199m tonnes. Our forecasts are relatively
unaffected by the appearance of the Omicron variant of covid-19, which is
assumed to be more transmissible but less severe than Delta, meaning that the
impact on global economic growth (and demand for agricultural commodities)
is expected to be short-lived.
World feed maize consumption continues to climb, with demand for animal
proteins such as meat, eggs and milk underpinned by rising populations, higher
incomes and longer-term shifts in dietary preferences. Overall use often hinges
on the availability of maize and price relationships with other grains and oil
meals. However, levels of feed consumption also depend on pasture conditions
and availability, as well as desired livestock weight, the economics of the meat
industry and feed efficiency ratios. Global consumption of feed maize is set to
accelerate by 3% year on year to 701m tonnes in 2021/22, potentially a new
record high. Although price considerations will continue to play an important
role in the exact feed mixes into 2022/23 (and beyond), we expect maize to
remain the most widely used feed grain in the coming years. With meat and
dairy demand continuing to trend higher, we forecast that 2022/23 feed maize
consumption will rise by a further 3% to 721m tonnes.
Processing demand typically accounts for nearly 30% of total consumption,
averaging 299m tonnes in the five years to 2020/21. About half of this is for the
production of fuel ethanol, with the remainder used for myriad other industrial
products, including starches, sweeteners, industrial alcohol, adhesives and
bio-based plastics. The US is the largest single industrial processor of maize,
followed by China, the EU, Brazil, Canada, India and Argentina. As economic
activity recovers and covid-19 restrictions are eased, growth in global industrial
maize consumption will accelerate in 2021/22, to reach 307m tonnes, up by 3%
year on year.
www.eiu.com © The Economist Intelligence Unit Limited 2022
2 Maize
The US accounts for more than half of
global industrial demand
Direct human food use continues to
expand in Sub-Saharan Africa
World commodity forecast March 2022
The US is by far the leading processor, with demand projected to reach
163m tonnes in 2021/22. Processors are expected to use 133m tonnes of maize for
the manufacture of fuel ethanol in 2021/22, up by 4% on the previous season,
but still down by 6% from its 2017/18 peak. US ethanol production plunged in
the immediate aftermath of the pandemic, as stay-at-home orders restricted
movement, cutting demand for road fuels. Amid changing travel habits, the
pace of recovery has been slow, with nationwide ethanol production only
recently climbing back above pre-pandemic levels. Assuming that there are no
further lockdown measures in response to new coronavirus variants, we expect
ethanol production to remain high in the coming months, especially if blenders
look to rebuild stocks. However, remote working opportunities, advances in fuel
efficiency and the increased adoption of electric vehicles could continue to be a
limiting factor in the longer term. Although there are opportunities to expand
ethanol exports, including to China, we do not expect a significant uptick in
sales over the next few years. Domestic processing demand is expected to rise
by only 1% in 2022/23, to about 170m tonnes.
US biofuel policy remains highly divisive, with powerful lobby groups from
ethanol producer groups and the oil industry quick to issue legal challenges in
response to planned policy changes. Reflecting covid-19-related shocks, latest
proposals from the Environmental Protection Agency included retroactive
adjustments to biofuel blending requirements for 2020 and proposed 2021
volumes set in line with projected use this year. The conventional renewable
fuel requirement (mainly maize-based) for 2022 is proposed to be set back at the
statutory volume of 15bn gallons. Ethanol is an important octane booster and is
now the primary oxygenate used in gasoline. With 10% ethanol (E-10) blends
now accounting for more than 95% of the fuel consumed in US motor vehicles,
we would not expect the proposed policy tweaks to have a major impact on
absolute levels of ethanol consumption. Blending economics are instead likely
to remain the main driver of ethanol production in the short term.
Maize is an important food staple for an estimated 1.2bn people, mainly in
eastern and southern Africa, but also across parts of Latin America and Asia.
While data on food use are unavailable in most countries, global consumption
for food is forecast at around 133m tonnes in 2021/22, up by about 2% year on
year and compared with about 100m tonnes a decade ago. Sub-Saharan Africa
accounts for about half of world food maize consumption, where the overall
levels of food maize consumption are generally thought to have kept pace with
population growth. Maize is consumed in many forms across the continent,
using a number of different processing methods, but with a strong preference
for white maize varieties. Consumption needs in Sub-Saharan Africa are met
mainly with domestic supplies, with production recently trending higher on
increases in both harvested area and yields, mostly on smallholder farms.
Imports typically account for only about 5% of total demand, averaging less
than 3m tonnes per year over the past five seasons. South Africa is the region's
largest supplier, but Argentina is an important source of yellow maize, used
primarily for livestock feed. Total maize consumption in Sub-Saharan Africa is
estimated at 82.4m tonnes in 2021/22, 3% higher year on year, with South Africa,
Nigeria, Ethiopia, Tanzania and Kenya the top five users.
www.eiu.com © The Economist Intelligence Unit Limited 2022
Maize 3

Trade is on an upward trajectory,
with China now a major buyer
Mainly because of a projected drop in Chinese import demand, trade is forecast
to contract by 2% in 2021/22 (basis July-June), to 185m tonnes, potentially
marking the first year-on-year contraction in more than a decade. Latest price
movements and expectations of a large domestic crop suggest that Chinese
imports could drop by about 19% year on year to 22m tonnes, which is still
enough to be the largest single buyer. Maize shipments to the EU are also
forecast to be smaller, dropping to a five-year low of 14.7m tonnes, owing to an
expected large domestic harvest and the availability of rain-damaged, lower-
quality wheat in France. In contrast, imports to other leading destinations,
including Mexico, Vietnam, South Korea, Iran and Egypt, are forecast to be
higher year on year. The outlook for 2022/23 remains tentative and depends on
market dynamics. However, given an anticipated rise in world feed use,
imports are likely to remain at elevated levels of about 185m tonnes.

Maize: consumptiona
(m tonnes unless otherwise indicated)
2018/19 2019/20 2020/21 2021/22 2022/23
US 310.5 309.5 304.1 315.2 318.0
China 274.0 278.0 285.0 292.1 300.9
Japan 16.0 16.1 16.1 16.2 16.2
Other East Asia 110.2 111.4 117.0 120.2 122.0
Brazil 66.0 69.0 70.5 73.0 76.0
Mexico 44.0 43.8 43.5 43.8 44.4
Other Latin America 48.7 49.8 49.3 50.3 52.0
EU 88.0 83.4 76.3 79.9 78.0
Sub-Saharan Africa 75.9 76.7 79.9 82.4 83.0
North Africa 25.5 27.0 27.7 27.0 27.5
Others 72.0 73.2 75.6 79.0 81.0
Total 1,130.8 1,137.9 1,145.0 1,179.1 1,199.0
% change 3.2 0.6 0.6 3.0 1.7
a Local marketing years.
Sources: US Department of Agriculture (USDA); EIU; national statistics agencies.

Supply Despite sustained improvements in agronomic practices and developments in

seed technology, world production has stagnated in recent years, with spells of
difficult weather curtailing output in some countries. Although there were
unusual back-to-back declines in world production in 2019/20 and 2020/21,
cumulative output stayed above 1.1bn tonnes, higher than the averages of the
previous five years. With bumper crops already harvested in the US, China,
Ukraine and the EU, global production in 2021/22 will be the largest on record.
Although there remains much uncertainty about the impact of a second
successive La Niña weather event on final outcomes in the southern
hemisphere, cumulative world output is forecast to increase by 8.6%, to
1,204m tonnes, an annual gain of 96m tonnes, marking the fastest year-on-year
growth in five seasons. Although solid gains in production are anticipated, world
supplies are projected to rise by only about 4% year on year, constrained by
relatively tight carry-on stocks. Looking ahead to the 2022/23 season, plantings are
provisionally expected to remain high, potentially lifting output to
1,206m tonnes. However, competition for available farmland could be

World commodity forecast March 2022 www.eiu.com © The Economist Intelligence Unit Limited 2022
4 Maize
US production is expected to increase
in 2021/22
Acreage in China is beginning to
increase again
World commodity forecast March 2022
particularly stiff in the next season, especially in the US and Ukraine. Seeding
intentions could also be complicated by the recent surge in fertiliser prices,
which could incentivise some shifting into other crops.
Despite disparities across a number of producing states, results from the 2021/22
US harvest mostly exceeded earlier expectations, with production forecast to be
7% higher year, at 383.9m tonnes, the second-largest on record. Incoporating
latest, larger than previously expected, acreage data, the forecast has increased
by 1.3m tonnes compared with our previous forecasting round. The good
overall performance amid mediocre mid-summer weather is not only a
testament to the latest technologically advanced seed varieties and efficient
farming techniques, but also partially reflects good early planting conditions,
which led to a successful crop in the spring, and timely rains in a number of
previously dry states. We continue to expect a slight increase in plantings for the
2022/23 season, with production slightly higher, at a record 385m tonnes.
However, as maize requires relatively intensive use of fertilisers, herbicides and
pesticides compared with alternatives, including soybeans, much may depend
on whether the recent rally in input prices is sustained over the coming months.
Planting will start as early as March in some of the more southerly producing
states, with fieldwork in the main Corn Belt beginning a few weeks later,
normally in April.
Buoyed by high prices and additional government subsidies, 2021/22 maize
plantings in China increased for a second consecutive season. Although much
of the additional area stemmed from switching away from less-profitable
soybeans, the high prices also reportedly spurred plantings on previously idled
agricultural land. Latest official data confirmed production in line with our
estimate of 273m tonnes, a gain of 5% year on year. As subsidies are expected to
continue into the next season, output for 2022/23 could edge higher, to
275m tonnes. With China’s arable land shrinking over the past decade or so, the
country faces some pressing challenges if food self-sufficiency targets are to be
attained over the coming years. Faced with rising demand for both maize and
soybeans in the coming season, the agriculture ministry recently unveiled plans
to promote intercropping on about 1m ha of farmland across 16 provinces,
under which both crops would be planted in strips in the same fields. Although
the system requires significant planning, intercropped maize and soybean fields
typically offer yield advantages, improved land use efficiency and the potential
for reduced use of chemical inputs, including nitrogen fertilisers. The
government is also beginning to change its stance on genetically modified (GM)
technology. Recent regulatory changes and planned safety approvals of new
GM varieties of maize seeds developed by domestic companies have paved the
way for the eventual commercialisation of GM technology in China. Although
China allows imports of certain GM grains and oilseeds for animal feed, the
cultivation of GM crops has long been prohibited. The latest traits reportedly
include varieties with strong insect resistance, including fall armyworm, which
has resulted in localised crop losses in recent years. There is much uncertainty
about the potential timeline for the introduction of GM crops, but the new
technology is expected to play an important role in maintaining domestic food
security in the coming years.
www.eiu.com © The Economist Intelligence Unit Limited 2022
Maize
Production in Brazil is forecast to
rebound sharply in 2021/22
Production is set to remain high in
Argentina
Maize yields in Ukraine have been
volatile in recent years
World commodity forecast March 2022
5
Owing to sustained dry weather in Brazil’s southern producing states, the
outlook for 2021/22 full-season (first) maize crops has deteriorated in recent
months, with farmers in Rio Grande do Sul and Parana reporting generally poor
results from the early stages of the harvest. A drier pattern in southern Brazil is
fairly typical under a La Niña weather event, which materialised for a second
successive year in September. Planting of the safrinha 2021/22 crop, which
typically accounts for about 75% of national output, is now under way, with
producers in Mato Grosso making very good early progress. Current high prices
are expected to incentivise additional plantings in the main central growing
region, where soil moisture reserves are currently good. Assuming that the
soybean harvest proceeds normally, there is a good chance that the safrinha
plantings will be completed within the optimal timeframe, supporting 2021/22
yield potential. However, in the light of the surge in fertiliser prices and tight
world availabilities, it seems likely that producers will opt to apply fewer farm
inputs, which could cap productivity. Factoring in a downgraded forecast for the
first crop, we have lowered our 2021/22 production estimate by a further
2m tonnes, to 113m tonnes, which would still be an all-time time record and
33% more than the previous season, when a combination of overly dry and
cold weather severely affected yields. With much of the country’s exportable
surplus stemming from the safrinha crop, Brazil should still be in a position to
ramp up exports in the second half of 2022.
Farmers in Argentina have been incorporating more complex acreage mixes in
recent years, with many moving away from soybean monocropping. As farmers
are especially wary of the potential of damaging La Niña weather in December
and January, a much larger than normal proportion of the 2021/22 crop was
sown to late season varieties, which are typically lower yielding but may
benefit from cooler, potentially wetter, conditions later in the year. Despite
some heat stress to crops in parts of Santa Fe, Entre Rios and Buenos Aires
provinces around the turn of the year, heavy rainfall in the second half of
January provided extremely timely moisture for late-season crops. Although
much will depend on weather over the coming weeks and months, forecast
production is maintained at a record 54m tonnes, 11% higher year on year. As
part of ongoing efforts to limit rampant inflation, the government recently
published new proposals aimed at decoupling domestic grain prices from the
global market. The latest strategy includes a formal limit on maize (and wheat)
exports, with volumes determined by the government's supply and demand
projections. Although the maize quota for the 2020/21 marketing year was not
especially prohibitive, set at 41.6m tonnes, local farmers are generally opposed
to the interventionist policy, arguing that the potential drop in farmgate prices
could threaten future agricultural investment, as well as altering future planned
crop rotations.
Owing to increasingly expensive mechanical drying costs, many farmers in
Ukraine opted to dry 2021/22 crops down in the field, resulting in a much later
harvest than normal. Although early yields were disappointing, productivity
has trended higher since October, with production now forecast to reach
40m tonnes, 10m tonnes more than the previous year. The huge harvest has
weighed on domestic prices in recent months, with maize now very
competitive for inclusion in domestic feed rations, mostly displacing wheat and
www.eiu.com © The Economist Intelligence Unit Limited 2022
6 Maize

barley. Nonetheless, most of the additional surplus will be channelled into

exports, which we expect to rise by 39% year on year to 33m tonnes. China has
emerged as the top destination in recent seasons, accounting for more than a
third of recent exports. Factoring in potentially lower yields and the likelihood
of strong competition for land from oilseeds, the 2022/23 harvest could dip
slightly, to 36m tonnes, which will still be large enough for a substantial
exportable surplus.

Maize: productiona
(m tonnes unless otherwise indicated)
2018/19 2019/20 2020/21 2021/22 2022/23
US 364.3 346.0 358.4 383.9 385.0
China 257.3 260.8 260.7 273.0 275.0
Other East Asia 76.5 78.4 79.9 81.0 81.5
Brazil 100.0 102.0 85.0 113.0 119.0
Argentina 51.0 50.0 48.5 54.0 54.0
Mexico 27.6 26.5 27.0 28.5 29.0
Other Latin America 31.0 29.0 28.6 30.2 30.3
EU 64.4 66.7 64.0 70.0 66.0
Ukraine 35.8 35.9 30.0 40.0 36.0
Other CIS 17.2 19.8 19.1 20.8 21.0
South Africa 11.8 15.8 17.0 17.0 16.5
Other Africa 68.5 67.1 72.3 74.5 74.0
Others 16.8 17.5 18.2 18.5 19.0
Total 1,122.2 1,115.5 1,108.7 1,204.4 1,206.3
% change 4.0 -0.6 -0.6 8.6 0.2
a Mainly harvested July-December (in the southern hemisphere early the following year).
Sources: Sources: US Department of Agriculture (USDA); EIU; national statistics agencies.

Stocks and prices After four years of tightening, global maize stocks are forecast to increase by about
9% year on year to 292m tonnes in 2021/22, but still 8% lower than the average in
2016/17-2020/21. Chinese maize stocks account for 70% of the global total, but
with so much uncertainty surrounding the true level of grain inventories in China,
it is perhaps more useful to focus on cumulative inventories in the major suppliers
such as Argentina, Brazil, Ukraine and the US. We forecast that end-season stocks
in these four countries will increase by 20% to 49.7m tonnes, still 24% below the
previous five-year average.

Maize: supply and demand

(m tonnes unless otherwise indicated)
2018/19 2019/20 2020/21 2021/22 2022/23
Productiona 1,122 1,116 1,109 1,204 1,206
Consumption 1,131 1,138 1,145 1,179 1,199
Balance -9 -22 -36 25 7
Tradeb 165 174 189 185 185
% change 8 6 8 -2 0
Stocksc 326 303 267 292 300
Main exporters 69 60 41 50 53
Stocks ratiod 105 97 84 89 88
a Mainly harvested July-December. b Excluding intra-EU trade. c World stocks; end of respective
crop years. d Stocks in terms of days of consumption.
Sources: IGC; EIU.

World commodity forecast March 2022 www.eiu.com © The Economist Intelligence Unit Limited 2022
Maize 7

The unusually low level of exporter inventories is mainly linked to a recent

steady drawdown in US stocks, with carryovers projected to stay relatively tight
in 2021/22, at 39.1m tonnes, compared with an average of 49.8m tonnes over the
past five years. Given recent production woes, combined with strong domestic
and overseas demand, Brazil's maize stocks are also expected to remain tight.
Inventories in Ukraine and Argentina are typically small, each averaging about
2m tonnes in a normal year. Our initial analysis of 2022/23 supply and demand
drivers shows a similar outlook for the following marketing year. Although
world and exporter stocks are both forecast to increase, inventories are set to
remain smaller than average, including in the US. This could offer sustained
price support, especially in the event of a large weather shock to a major
exporter or importer.
Building on gains during the previous month, average export prices (Argentina,
Brazil, Ukraine and the US) rose by a net 7% in January, spiking to a fresh seven-
month peak, up by about 10% compared with a year earlier. The upside was
again mainly driven by damaging dry weather in southern Brazil and Argentina,
cutting exportable surpluses and possibly resulting in some additional demand
for US supplies. The US market also drew support from strong ethanol demand
from domestic ethanol producers and concerns that rising fertiliser costs could
potentially restrict planting decisions next year. Traders were also closely
monitoring geopolitical developments, especially with regard to heightened
tensions between Russia and Ukraine, amid speculation about how possible
military intervention might affect busy grain-shipment programmes from the
region.
Supply-side fundamentals are likely to more than offset the large economic risks
associated with the ongoing pandemic. With little margin for production
shortfalls, the current weather premium built into markets is likely to persist
into 2022, especially given the risk of further La Niña-related disruptions to
South American crops in the coming months. Owing to tight exporter stocks
and a strong demand outlook, the downside is likely to be limited, especially if
China is again a major buyer. Export prices (US 3 Yellow Corn fob Gulf) are set
to stay strong and are estimated to remain higher than average in 2022-23.

Maize: stocks and prices

2020 2021 2022 2023 2024
Stocksa
1 Qtr 202 196 203 210 211
2 Qtr 127 104 115 121 122
3 Qtr 49 31 39 44 -
4 Qtr 287 296 307 307 -
% changeb -13.5 -35.7 24.5 12.8 -
Pricesc
1 Qtr 174 251 275 255 250
2 Qtr 155 295 270 255 250
3 Qtr 175 274 265 255 -
4 Qtr 219 269 260 250 -
Year 181 274 264 254 -
% change 2.8 51.4 -3.6 -3.8 -
a US domestic stocks; m tonnes. b Year on year at September 30th. c Export prices of US No.3 Yellow
Corn fob Gulf; US$/tonne.
Sources: Sources: US Department of Agriculture (USDA); EIU; national statistics agencies.

World commodity forecast March 2022 www.eiu.com © The Economist Intelligence Unit Limited 2022
8 Maize

Maize: stocks and prices

US domestic stocks (m tonnes); Export prices of US No.3 Yellow Corn fob Gulf
left scale (US$/tonne); right scale
350 350

300 300

250 250

200 200

150 150

100 100

50 50

0 0
2015 16 17 18 19 20 21 22 23 24
Sources: US Department of Agriculture; International Grains Council; EIU.

Editors: Sanjeeban Sarkar (analyst); Matthew Sherwood (consulting analyst)

Editorial closing date: February 9th 2022
All queries: Tel: (44.20) 7576 8000 Email: london@eiu.com
Next report: To request the latest schedule, email schedule@eiu.com

World commodity forecast March 2022 www.eiu.com © The Economist Intelligence Unit Limited 2022