August 1999

WEATHER BRIEFS

MEXICO: SHOWERS FAVOR CORN CROP; NORTHEAST REMAINS TOO DRY

During June 1999, the "rainy season" began on time, providing needed moisture for corn planting. Rainfall was near to above normal across the main corn belt, above normal in northern and north-central Mexico, and slightly below normal in the northeast. During the first 10 days of July 1999, widespread showers provided adequate moisture for vegetative corn across the Southern Plateau corn belt. Beneficial showers reached into north-central Mexico (Durango), the northeast (Tamaulipas and Nuevo Leon), and the northwest (Sonora), increasing reservoir supplies. Drier weather prevailed in the extreme north. Tropical showers possibly caused some flooding in southern Mexico. Widespread showers increased moisture supplies across the Yucatan Peninsula. The week of July 11 - 17 was highlighted by lighter than normal showers in the Southern Plateau. Moisture levels remained adequate to favor vegetative corn grown there. Also, showers boosted reservoir levels in northwestern Mexico and showers continued to improve moisture supplies in the Yucatan Peninsula. From July 18 - 31, showers were widespread and seasonal across the Southern Plateau corn belt, benefitting vegetative corn. While monsoonal showers continued to water the northwest, only light showers fell across the dry northeast.

FORMER SOVIET UNION: BENEFICIAL RAIN FOR SPRING GRAIN IN NEW LANDS

Spring grains in the New Lands (Kazakstan, the Urals, Western Siberia) benefitted from generally favorable weather during July. Precipitation was near to above normal for the second consecutive month in major grain-producing areas, except for parts of Western Siberia where conditions had become slightly dry by the end of the month. Temperatures averaged above normal in July, and climbed sharply late in the month as the crop was advancing through the grain-fill stage. Meanwhile, the threat of locust damage has raised alarms in Russia and Kazakstan. Agricultural officials indicate that 3 to 5 percent of total crop area could be damaged by locusts, but no damage-assessment reports have been released in either country.

INDIA: MONSOON ACTIVITY CONTINUED NORMAL

During the week of July 18 - 24, 1999, widespread, locally heavy rain covered primary oilseed areas of west-central India. The moisture improved prospects for groundnut and soybean establishment while allowing a resumption of planting in the driest areas. Beneficial rains also developed over the rice and cotton areas of northern India. However, during the week of July 25 - 31, monsoon activity diminished over southern, northwestern, and eastern sections of the region. As a result, unseasonably dry weather (rainfall totaling 10 millimeters or less) dominated important oilseed, cotton, grain, and sugarcane areas from Pakistan southward to India’s southern tip. The heart of the soybean belt (western Madhya Pradesh) continued to receive timely, albeit below-normal rainfall. Unfortunately, the drying trend became entrenched over Gujarat’s groundnut basin and continued into early August. In contrast, heavy rain returned to the eastern rice belt in early August, spurring localized flooding.

FEATURE COMMODITY ARTICLES

ASIA AND OCEANIA OILSEED PRODUCTION

Asia along with Oceania will produce an estimated 110 million tons of oilseeds plus palm oil in 1999/2000 out of 301 million produced world-wide. Asia and Oceania do not produce vegetable oil crops at a level commensurate with their population, but do produce at a level comparable to their percentage of gross world product (GWP). Asia and Oceania produce 37 percent of the world’s oilseeds plus palm oil while they have 58 percent of the world’s 5.9 billion people and while they produce 35 percent of the world’s $38 trillion GWP. By contrast, The United States produces 30 percent of the world’s oilseeds while it has 5 percent of the population and produces 21 percent of GWP. (Population and GWP data are taken from the World Fact Book, CIA, 1998; GWP data are on an adjusted purchasing power basis.) Oilseed plus palm oil output in Asia and Oceania is forecast to be at a record in 1999/2000, in line with trend and up because of generally favorable weather thus far during the year; and output is forecast to be up 42 percent over the last 10 years.

East Asia: Within Asia, East Asia (China, Japan, North and South Korea, Taiwan and Mongolia) is the largest producing region. East Asia is forecast to produce 44.3 million tons of oilseeds in 1999/2000. This total includes 13.8 million tons of soybeans, 12.1 million tons of peanuts, 9.7 million tons of rapeseed, and lesser amounts of cottonseed and sunflowerseed, but no tropical oilseeds. East Asia has a temperate to subtropical climate

China is by far the largest producer of oilseeds in the region, and the weather has been largely favorable for oilseeds this year. The rapeseed crop did not suffer from freeze damage as it did in 1998, and a bumper crop is forecast. Peanut area and production are expected to reach record levels in 1999. An inefficient marketing and transportation system in northeast China has led to a decline in soybean area in the last two years as processors in central and southern China have shifted to using cheaper and higher quality imported soybeans.

Oilseed output in East Asia increased from 1989/90 through 1995/96 as liberalized economic policies were applied at the farm level in China. Output has been fairly flat since 1995/96.

South Asia: South Asia (India, Pakistan, Nepal, Bhutan, Bangladesh, and Sri-Lanka) is the second biggest producing region in Asia, and is dominated by Indian oilseed production. The South Asia climate encompasses a southern temperate zone in northern India to a northern tropical climate further south, and produces all major types of oilseeds, but very little palm oil. It is forecast to produce 8.5 million tons of cottonseed, 8.2 million tons of peanuts, and 6.6 million tons of rapeseed in 1999/2000.

A tariff reduction in India and low world oilseed prices have reduced incentives to produce this year, but strong demand will keep area harvested at levels similar to last year. Inconsistent rainfall since June is causing concern in some areas, but generally the outlook for the crop is good. Pakistan cottonseed production is expected to be up on slightly higher area and yield.

Output in South Asia is forecast at 31.6 million tons for 1999/2000. Output over the past decade has increased due to a larger harvested area and rising yields. Higher demand for oilseeds plus palm oil in the region corresponds with higher incomes and higher per capita consumption.

Oceania: Oceania (Malaysia, Indonesia, Philippines, Papua New Guinea, Brunei, and Singapore) is a large producer and exporter of tropical oils. In 1999/2000 it is forecast to produce 17.0 million tons of palm oil, 5.0 million tons of palm kernels, 3.9 million tons of copra. In addition, it is forecast to produce about 1 million tons each of peanuts and soybeans.

Output of palm oil and copra dropped sharply in Oceania in 1997/98 as a result of the El Nino related drought of 1997 which affected virtually the entire region. Palm oil output recovered in 1998/99, and copra output is expected to recover in 1999/2000. Total oilseeds plus palm oil production is forecast at a record 28.2 million tons in 1999/2000, up from the previous record 26.0 million set in 1996/97.

Over the past 10 years, expansion of palm oil production has been dramatic as output in Oceania has nearly doubled. Large investments in new plantations have occurred in Malaysia, Indonesia, and Papua New Guinea, and expansion is expected to continue. Oceania is very dependent on exports to maintain its palm oil output. The European Union, China, India, and Pakistan are four of its biggest markets, taking over 1 million tons per year each in recent years. Output of other oilseeds in Oceania has remained fairly constant during the past 10 years. The Philippines and Indonesia continue to be major producers of copra and suppliers of coconut oil to international markets.

Central Asia: Central Asia (Kazakhstan, Uzbekistan, Kyrgystan, Turkmenistan, Tajikistan, Afghanistan, and Iran) is an important producer of cottonseed. Of the 3.5 million tons, of oilseeds it is forecast to produce in 1999/2000, 3.2 million will be cottonseed. Central Asia has an arid temperate climate and is very dependent on irrigation for the production of oilseeds.

In Uzbekistan, cool wet weather caused oilseed output to decline in 1998/99, but output in 1999/2000 should rebound to near the 1997/98 level of 0.27 million tons, assuming normal weather from here on. A drought during the spring and early summer in Iran caused concern for crops there, but rains in the last few weeks have alleviated much of the worry.

Central Asian oilseed output is down 33 percent from 5.2 million tons in 1989/90. The decline over the last 10 years is attributable to land being shifted into other crops, as well as occasional difficulties acquiring fertilizer and other inputs. A weakening in world demand for cotton since 1996/97 is also a factor.

Southeast Asia: Southeast Asia (Burma, Thailand, Laos, Vietnam, and Cambodia) is forecast to produce 2.7 million tons of oilseeds plus palm oil in 1999/2000. The region is mostly tropical, but not equatorial, and has a rainy season which runs from May through October in most areas. The region is forecast to produce in 1999/2000: 1.1 million tons of peanuts, 0.5 million tons of palm oil, and 0.5 million tons of soybeans. Southeast Asian production is insufficient for domestic use, and Southeast Asia is a net importer of palm oil and oilseeds, but a net exporter of peanuts.

Oilseed plus palm oil output is forecast 4 percent above last year, but down marginally from the record set in 1996/97. The increase is due to an increase in palm oil output in Thailand which has benefitted from good rainfall since late 1998. This increase follows the drought in late 1997 which reduced the output level in 1998/99. Soybean production in Thailand is forecast down as the comparative advantage is favoring alternative crops such as corn and mung beans.

Oilseed plus palm oil output in Southeast Asia over the last decade has increased 20 percent. Output of palm oil has increased 186 percent as rubber production declined in southern areas. Peanut output is up significantly in Burma and Vietnam, while copra production is up in Vietnam. Output of soybeans is down as trade barriers for their importation into Thailand have been reduced.

Paul Provance, Oilseeds Chairperson
Telephone: (202) 720-0881
E-mail: provance@fas.usda.gov

DURUM WHEAT PROSPECTS FOR 1999/2000

Durum wheat production for 1999/2000 in selected durum-producing countries is estimated to be lower than last year due to decreases for the United States, EU-15, and Canada, countries which in aggregate account for nearly sixty percent of the global production. Reductions are also expected in Syria, Turkey, Algeria, and Morocco. This season’s major factor reducing crop size is unfavorable weather.

Approximately 5 percent of all wheat grown is durum. The 1999/2000 crop is forecast at 24.6 million tons, down 6.4 million or 21 percent from last year’s record level. Harvested area is estimated at 14.6 million hectares, down 1.7 million from last season, while yield is forecast 4 percent below the 5-year average at 1.68 tons per hectare.

United States: Total U.S. durum wheat production for 1999/2000 is forecast at 3.1 million tons, down 19 percent from last season according to the National Agricultural Statistics Service’s (NASS) Crop Production report, based on conditions as of August 1. Durum harvested area is estimated at 1.6 million hectares, up 5 percent from 1998/99. About 5 percent of all U.S. wheat grown this season is durum and about 75 percent of the U.S. durum is grown in North Dakota. North Dakota’s crop was planted late due to excessive moisture and is about a week behind in development. Late July’s hot, humid weather saw condition ratings fall to 60 percent good or better as of August 1. In addition, wheat midge and head scab are concerns in northeastern counties. North Dakota’s output is projected to fall 12 percent as a decrease in yield more than offsets an increase in area. The first of the durum crops, harvested in Arizona and California (together accounting for 14 percent of total U.S. durum), have fallen 53 and 46 percent, respectively, from 1998/99 due mainly to decreases in area.

EU-15: Durum wheat output is estimated at 7.6 million tons, down 1.1 million or 12 percent from last season. Year to year drops in production are forecast for Spain and Italy, while output is projected to rise in France and Greece. Total harvested area is forecast at 3.2 million hectares, up 1 percent from last season. The continued strength in durum area is attributed to the reduction in the EU set -aside rate. In Spain, drought in the prime durum areas of the south disrupted planting and caused area to drop below last season’s level. Although the weather improved in May, the precipitation was too late for the earlier maturing crop and production fell to an estimated 0.5 million tons, down 65 percent from last year.

Italy’s production is also forecast lower at 4.1 million tons, down 0.4 million from last season. Harvested area is forecast to increase slightly despite the continued domestic market depression and the elimination of the previous system of individual farm quotas. This system has been replaced by regional quotas with a total national ceiling of 1,646,000 hectares eligible for the supplementary compensatory payments (667,000 lire/hectares, or about $385). Yield is not expected to reach the record high levels of 1998 due to lower input utilization resulting from reduced support for farmers. In addition, spring drought, hailstorms, and intensive rains during mid-June negatively impacted the yield and quality of the crop in Apulia (the most important durum producing region).

For France, the weather has been favorable throughout most of the season. Production is forecast at 1.6 million tons, up 5 percent from the 1998/99 crop due to higher area. Yield is forecast at 5.00 tons per hectare, lower than last season’s record level. Wet weather has delayed harvest activities. Total-yield for the EU-15 is forecast at the 5-year average of 2.43 tons per hectare.

Canada: Producers switched from planting durum to spring wheat this season, largely due to weak international prices. This season’s forecast area of 1.9 million hectares is down nearly 1.0 million from 1998/99. Excessive rainfall in parts of Saskatchewan resulted in farmers being unable to fulfill their planting intentions. Approximately 80 percent of the durum wheat is grown in Saskatchewan. Variable weather since planting and spotty field conditions (caused by incomplete planting) has resulted in a national yield forecast near the 5-year average at 2.08 tons per hectare. Consequently, production of durum wheat is estimated at 3.9 million tons, down 2.2 million tons or 36 percent from the harvest of a year earlier.

Former Soviet Union: Russia and Kazakstan are the primary producers of durum in the former Soviet Union. Neither State publishes durum area or production estimates; however, Russia's durum production is estimated at 1.6 million tons, up 14 percent from the last season’s drought reduced crop. Hot, dry temperatures in the main durum growing area of the Volga Valley again negatively affected yield, but not to the extent of last year – yield is forecast up 13 percent from 1998/99. In Kazakstan, durum production is estimated at 0.1 million tons, down 0.1 million from last season due to a decline in area. Practically all durum is produced by firms that have pasta production facilities and is not exported.

India: Durum production is forecast at 0.9 million tons, down 0.2 million or 15 percent from last year. Although there are no official estimates for durum wheat, reports indicate that durum area is reduced from the previous season due to low price realization and marketing problems. Growing conditions were favorable this season. About 90 percent of the durum produced comes from Punjab and Madhya Pradesh with Gujarat also producing some minor quantities. Harvesting occurs during April and May.

Turkey: Durum output is estimated at 2.0 million tons, down 0.4 million or 17 percent from last year's record crop due to drought in the southeast. The Southeastern Anatolia Region produces about 50-60 percent of total durum wheat and some non-irrigated wheat areas in the Southeastern Region were badly affected by the drought this year. However, a significant amount of durum areas in the region were irrigated and, hence, were not affected. The remaining 40-50 percent durum is produced in Central Anatolia, around Ankara and Kayseri, which were not so much affected by drought. Harvested area is forecast at 1.0 million hectares, down slightly from last season due to the dry weather. However, farmers continued to plant durum in response to higher support prices versus other wheat. The1999 support prices are lower than last season, but remain way above world market levels. The "sunni" insect, which regularly infests the crop, was much worse than previous years due in part to the dry weather. Durum wheat production is not broken out in Turkish official statistics and production is often not marketed.

Algeria: The durum crop is estimated at 1.2 million tons, down 0.4 million or 23 percent from last year's bumper crop. Harvested area is forecast at 1.3 million hectares, down 19 percent from 1998/99, but still a high level. Early-season rainfall was beneficial for planting, but late season dryness and heat diminished yield potential. Almost 70 percent of the total area sown to wheat is durum, which is primarily located in the eastern and central production areas.

Morocco: The durum output is estimated at 0.8 million tons, down 0.8 million or 52 percent from last season’s record crop. Interestingly, over the last several years, Morocco has alternated between bumper and very poor harvests; this season’s harvest obviously falls in the poor category. Durum area is forecast at 1.1 million hectares, slightly below last year. The late arrival of rains was followed by intermittent rainfall, but later in the season hot, dry weather severely reduced yield prospects. Roughly 40 percent of the wheat grown in Morocco is durum wheat and is grown mainly in the north.

Tunisia: Durum production is estimated at 1.1 million tons, virtually unchanged from the previous season's poor crop. A late start of the rainy season was followed by generally favorable weather, but a mid-season dry spell stressed the crops. However, beneficial rainfall during heading alleviated the moisture deficiency. Harvested area is forecast at 0.7