February 13, 1997
This report provides the data and tables from the current GRAINS: WORLD MARKETS AND TRADE, PART TWO.
This report draws on information from USDA's global network of agricultural attaches and counselors, official statistics of foreign governments, other foreign source materials, and results of office analysis. Estimates of U.S. acreage, yield and production are from the USDA Agricultural Statistics Board, except where noted. This report is based on unrounded data; numbers may not add to totals because of rounding. The report reflects official USDA estimates released in the World Agricultural Supply Estimates -->WASDE 323-February 12, 1997.
This report was prepared by the Grain and Feed Division, FAS. Agbox 1048, 14th and Independence Ave. Washington DC 20250. Further information may be obtained by writing to the division, by calling (202) 720-6219, or by FAX (202) 720-0340
The next issue of the Grains circular will be available electronically after 3:30 pm local time on March 12
EXECUTIVE SUMMARY Exports of Chinese corn for 1996/97 are expected to be up 500,000 tons from last month's forecast, to 1.0 million tons, while projected imports have been lowered by 450,000 tons, to 50,000 tons. The wheat export forecast for Australia is increased by 1.5 million tons to 16.5 million tons, a record amount. The Argentine corn exports forecast for 1996/97 was increased 250,000 tons, to a near-record 8.5 million tons. Estimated calendar year 1996 rice exports by Pakistan were raised to 1.7 million tons following heavy exports in November and December. The forecast for 1997 imports of rice by Brazil was lowered this month from 1.5 to 1.2 million tons. Forecast 1997 rice imports by Bangladesh were revised downward from 500,000 to 100,000 tons. Heavy purchasing of wheat points to a projected 1.5 million tons of additional imports by Iran. Canada's oats export forecast was revised downward 100,000 tons, to 1.5 million tons, while the forecast for EU exports was revised upward 250,000 tons, to 450,000 tons. Expected imports of oats in 1996/97 by the United States are 150,000 tons higher this month, standing at 1.9 million tons. WORLD AND U.S. GRAIN OVERVIEW WHEAT The forecast for 1996/97 world wheat trade stands at 90.9 million tons, which except for a brief mid-1980's dip represents the lowest level of international wheat trade in over fifteen years. Projected global production of 581 million tons -- the second-highest level on record -- represents an eight percent increase over last season. For the first time since 1992/93 production is anticipated to exceed consumption. The global bumper crop has reduced foreign trade and weakened international prices as booming production in all the major exporters and most of the traditional importers has prompted aggressive efforts by exporters to market larger supplies. While prices have reacted to the abundant harvests by dramatically falling from the record highs reached last spring, they remain relatively strong due to low stock levels, especially in the United States. This season's additional production will provide an opportunity to increase the world's severely depleted reserves by a projected 8.2 million tons, resulting in a 1996/97 global stocks-to-use ratio of 19.5 percent, a small increase from last year's record low ratio of 18.9 percent. RICE As final import and export data is released for 1996 and late arriving 1995 data becomes available, there have been numerous adjustments to world trade estimates for the past two years, as well as for 1997. Overall, changes in world trade estimates had a negligible net impact, with 1995 trade estimated at a record 21 million tons and 1996 trade estimated at 19 million tons, both unchanged from January. Forecast 1997 trade was lowered, however, from 18.2 to 18.1 million tons as reductions in export forecast for Pakistan and India were only partially offset by increased export forecasts for Argentina and the EU. Likewise, reductions in the 1997 import forecasts for Brazil and Bangladesh were largely offset by increased import forecasts for Iraq, Peru and Russia. COARSE GRAINS Global trade of coarse grains during 1996/97 is forecast at 89.3 million tons, up modestly from the 1995/96 trade level of 88.5 million tons. Global production of coarse grains in 1996/97 is expected to be sharply higher than in 1995/96, due largely to increased corn prospects in the United States, China, and the EU, and expected increases in barley production in Canada, North Africa, and the EU. Foreign coarse grain stock levels are forecast to rebound in 1996/97, mostly due to increases in Canadian and EU stocks. U.S. stocks, drawn down sharply in 1995/96, are projected to double in 1996/97, but remain at relatively low levels. World stock levels at the end of the 1996/97 season are forecast to increase 17 million tons to 109 million tons. The global stocks-to-use ratio is forecast to rise slightly to 12.5 percent, the third lowest on record. FOREIGN COUNTRIES' POLICIES AND PROGRAMS Vietnam Becomes Major Force in World Rice Market The emergence of Vietnam as a major rice exporter can be traced directly to declaration of the country's Doi Moi policy reforms mandated by the Vietnamese Communist Party in 1986. Key to these reforms were guarantees of land tenure for farming families and the opening of rice marketing channels to private traders. Prior to the implementation of these land tenure and marketing reforms under Doi Moi, Vietnam was regularly one of the world's leading importers of rice. During the past ten years, however, Vietnam's rice production has increased by two thirds and Vietnam is forecast to become the world's second largest rice exporter. Vietnam has been able to manage the transition to being a major exporter despite a 50 percent increase in domestic rice consumption fueled by strong population growth. As late as 1988 Vietnam was a net importer of rice. In 1989, however, Vietnam emerged as a major exporter of rice, with overseas sales of 1.4 million tons out of total world trade of 14 million tons. Since 1989 Vietnam's rice exports have grown steadily, topping 3 million tons- or 16 percent of world trade- in 1996. Not only has the volume of Vietnam's rice exports grown steadily, but its role in the world rice market has begun to change as well. Initially, Vietnam was able to produce only low quality rice for export. Consequently, while export volumes were large, United States rice exporters faced no direct competition from Vietnam. During the past two years there has been a notable increase in exports of high quality rice to markets such as Iran, Singapore and Malaysia traditionally supplied by the two premier suppliers of higher quality rice; the United States and Thailand. During the past eight years the importance of rice exports in the Vietnamese economy has grown along with export volumes. While the role of industrial exports grows rapidly and agricultural exports become less vital to Vietnam's economy, rice exports bring in from 20-25 percent of total export revenue. Continued heavy export tonnages and high world price levels should serve to ensure the key role that rice exports play in the generation of future export revenue. The role of the State in rice exportation Rice exports from Vietnam are heavily concentrated among state trading companies and are strongly influenced by the ministries of Trade, Agriculture and Rural Development, and Planning and Investment. Any description of the State's role in rice exports must begin with the issuance of export quotas. Two trading companies affiliated with the Government of Vietnam- the Northern Food Corporation and the Southern Food Corporation- make annual requests for export quotas based ton their own estimate of rice availability. These requests are then reviewed jointly by the three ministries mentioned above and export quotas are issued through the Ministry of Trade. It is standard practice for a conservative allocation to be granted at the beginning of the year- for 1997 an initial allocation of 2.5 million tons has been announced- to be followed by a supplemental allocation later in the year after harvesting of secondary crops.(An additional allocation of 250,000 tons is expected at mid year.) Ministerial involvement in exports is not limited to quota allocation. At the time of contract execution exporters must again apply to the Ministry of Trade for an export license, granted on a shipment-by-shipment basis. Export licenses are regularly denied in the event that contracted sales prices no longer reflect actual market values. As the international rice market is characterized by a high degree of price volatility and contract execution in Vietnam is rarely rapid, this has led to serious and recurring problem for importers of Vietnamese rice. There are two major export firms directly linked to Vietnam's central government. The Southern Food Corporation, based in Ho Chi Minh City, is by far the country's largest exporter, with exports regularly totaling 25 percent or more of total exports. Not only is the Southern Food Corporation the largest exporter in Vietnam, but also has substantial power to affect the share of other exporters through the distribution of export quota shares. In addition, SFC tends to be the executor of large government to government contracts with countries that are regular commercial purchasers. (e.g. the Philippines, Cuba, Indonesia). SFC's presence is felt in the market as the indicative price setter. Given the risk involved in obtaining export licenses when contract prices vary significantly from prevailing market price levels, other exporters tend to maintain export prices closely in line with those of SFC. The Northern Food Corporation (also known as Vinafood I), based in Hanoi, is the smaller of the two. Northern Food Corp. is given the responsibility of executing government to government export contracts to sensitive political allies. In 1996 almost all export shipments by Vinafood I went to Iraq. The Northern Food Corporation plays a very limited role in the export sector with 1996 exports of under 200,000 tons. Almost the entirety of remaining exports are shipped by food companies affiliated with provincial governments. Of course, the vast majority of these are from the provinces of the Mekong Delta, where Vietnam's exportable surplus is produced. For provincial governments, rice exports have become an essential source of revenue. Cash earned through these exports goes to support direct imports and business ventures carried out by the provincial governments. Thus far, efforts to centralize rice exportation in the hands of SFC and NFC have been thwarted by the provincial governments who have used their political clout in order to maintain their export autonomy. The role of foreign companies in Vietnamese rice exports While limited by export regulations and the system of export quota allocation, the role of foreign firms in Vietnam's rice export sector has been growing rapidly. Many multi-national trading firms (MNCs) have a well established presence in Vietnam. While legally unable to export rice, they instead act as agents- normally on behalf of the provincial food companies (fees for these companies are generally 1-2 percent of contract value). These MNCs will therefore often be listed as the importer of record despite the fact that the final destination is known to all parties at the time of embarkment. This system has enabled Vietnam to be a leading force in the international rice market despite a low level of marketing expertise on the part of the provincial food companies. Recently several joint ventures have been formed which have brought foreign companies directly into the milling and processing sector. This has significantly improved Vietnam's ability to produce high quality rice for export. Chief among these joint ventures is a mill operated by American Rice, Inc. in the Mekong Delta and a reprocessing facility run by the Golden Resource Corporation in HCMC. Both of these companies operate their joint ventures in cooperation with the Southern Food Corporation. While drastically increasing the availability of high quality rice for export from Vietnam, these companies have face heavy restriction in their attempts to garner quota share for direct rice exports. ARI, in particular, has received permission to export tonnages far below those agreed to by the GOV when the joint venture was established. Furthermore, while joint venture partners tend to provide the vast majority of capital for plant operation and improvement, they have found their partners unwilling to cede control of such decisions as what improvements are to be made, what equipment to be purchased, etc.... It is fair to say that the ultimate role of direct foreign investment in Vietnam's rice sector is still very much an open question. The Asian Development Bank recently issued a report which was very critical of Vietnam's rice export sector, its lack of transparency and state interference. While Vietnam has responded by issuing new regulations concerning eligibility for export authorization, these new regulations are sufficiently vague that any substantial change in export operations appears unlikely and would only become apparent over the course of time. The potential for further development of the rice export sector After posting record rice exports of 3.0 million tons in 1996, Vietnam's rice exports are expected to fall to 2.75 million tons in 1997. While future increases in export levels are certainly possible, they appear unlikely to be dramatic. Increases in exports over the last decade have been in response to phenomenal growth in Vietnamese rice production. Currently no significant new rice varieties are expected to provide substantial increases in Vietnam's rice production. In addition, after ten years of rapid growth in irrigated acreage and consequent increases in production area for rice, the marginal cost of adding irrigation infrastructure has begun to rise dramatically. Additions to current rice acreage through irrigation development should be limited in coming years. Also militating against further increases in the availability of rice for export is the return by many farmers to lower yielding, higher quality rice varieties. This movement is reported to be having a substantial impact on 1997 export availability (although crop damage due to heavy late rains is the largest single factor in the decline of export availability). Such a switch should allow Vietnam to make further inroads into high quality rice markets and permit farmers to maximize revenue on what are generally very limited amounts of farmland. Related to this switch is a growing diversion of rice land to other uses. As the Vietnamese economy grows, demand for rice land for industrial use, as well as for production of higher value crops such as fruits and vegetables imperils the pace of expansion of Vietnam's rice production. The most important factor in developing the Vietnamese rice sector is political. Issues of contract sanctity, reliability of export certification and the participation of foreign firms in the export sector must be resolved through increased transparency and openness in this sector. Only through substantial reform can Vietnam take advantage of its position as the world's second largest rice exporter to maximize the value of rice exports to the Vietnamese economy. For further information, please contact Morgan Perkins at (202) 720-2231. Mr. Perkins prepared this article after his recent travel in Vietnam. Iraq Buys French, Australian and Argentine Wheat Under UN Agreement Economic, political and bureaucratic forces are combining to guide Iraq's food purchases under the United Nations (UN) "Oil for Food" deal. Late in 1996, the UN agreed to allow the Government of Iraq (GOI) to sell up to $2.0 billion of oil during the first six months of 1997 under strict UN observance. Oil sales are subject to the proviso that 65 percent, or $1.3 billion, of the proceeds be used to purchase food and medicine for the Iraqi people. Under that $1.3 billion umbrella, the GOI has reportedly earmarked $804.6 million for food purchases, which will be split amongst the regions of Iraq. At the end of the six-month term the program will be reviewed and either reinstated or rescinded. Market analysts have been waiting to see what commodities the Iraqis would purchase and from where, with full knowledge that political considerations would play a large role in determining the origin. As of late January, the Government of Iraq had purchased wheat, rice, sugar and tea under the agreement. Wheat purchases reportedly total 1.2 mmt and are distributed among the EU, Australia and Argentina as in the graph at left (in 1000 metric tons). So far, only 100,000 mt has been approved by the U.N., as stipulated for all purchases under the agreement. If one assumes the 1.2 mmt figure is accurate and will be fully approved by the U.N., GOI wheat purchases are quickly approaching the 1.3 mmt program for wheat outlined in the UN-Iraqi agreement's Distribution Plan. Additionally, Australia reportedly expects to export 150,000-200,000 mt per month to Iraq from April through June. That would bring its exports to a maximum of 950,000 mt, near the one million mt per year pace Australia maintained before sanctions were established. It would also bring Iraqi wheat imports well above the reported 1.3 mmt program. Wheat purchases are currently forecast by USDA at 1.5 mmt for the first six months of 1997, which is right in line with Iraq's pre-sanctions import pace. Prior to the UN sanctions Iraq was importing an average of 3.0 mmt of wheat per year. Suppliers were Australia (around 39 percent based on a 1986/87-1989/90 average), the U.S. (31 percent) and the EC-12 (30 percent). Now, the U.S. will not likely receive any business from the GOI. Meanwhile, France has lent conditional support for the lifting of sanctions and has so far registered the largest sales of wheat. To replace U.S. wheat, Iraq has turned to a non-traditional supplier: Argentina. Under the UN program Argentine sales are 6.6 percent of the total so far and another 250,000 mt sale is rumored to be on the books. Despite this flurry of activity, Iraq has scarcely made a dent in its dollar allocation for food imports. With respect to wheat, total sales are roughly $230 million, using reported CIF prices ranging from $185 to $200/mt. That leaves $575 million eligible for wheat and other food purchases. With respect to rice, the GOI has contracted imports of 367,000 mt (not including 30,000 tons tendered but yet to be rewarded). Suppliers are: Vietnam (220,000 mt), Thailand (75,000 mt) and Pakistan (72,000 mt). For more information please contact Deanna Johnson at (202) 720-4204. Sharp Rise in U.S. Bulk Grain Exports in FY 1996 Not Matched by Grain Product Sales Large export volumes and high prices lifted fiscal 1996 (Oct95 - Sept96) United States grain and related product exports by $3.8 billion, to their highest level since the 1980/81 record. At $20.6 billion, grain and grain products* exports accounted for over a third of total U.S. agricultural exports for fiscal 1996, and for two-thirds of the U.S. agricultural trade surplus for the year. These export gains came mainly from bulk grains, as a result of decreased competitor supplies and high world prices. The United States had sufficient supplies of wheat and corn to take advantage of this opportunity and sharply expanded exports. This success, however, was not matched by exports of processed grain products (in total), which failed to increase in fiscal 1996. These products account for about one-sixth of the total value of grain and grain products exports. While export revenues of several key processed products groups continued to grow, the export performance of a few other groups, identified as having great promise at the beginning of the 1990's, has stalled. The mixed performance of processed grain exports is due, in large part, to the fact that significant export sales growth remains tied to only four key markets -- Canada, Mexico, Japan and the countries of the European Union -- markets with the ability to pay for higher-priced consumer- ready goods. Additionally, the processing technologies for grain-based products continue to be transferred abroad -- cereal production as an example -- as foreign markets grow and present value-added, domestic processing business opportunities within the consuming country. Breakfast cereal exports of $174 million, identified in the early 1990's as a "bright star" for exports of consumer ready foods, continue their disappointing, but probably predictable, export pattern. Canada, Mexico and the nations of the Caribbean remain key to export earnings taking over 60 percent of all U.S. cereal exports. Exports to Asian countries showed strong growth for the year and accounted for another 13 percent of U.S. exports. However, Kellogg's announcement of a major investment in cereal manufacturing facilities in Thailand continues the pattern of processing technology moving closer to the end-use markets. While Thailand has not been a significant market for U.S. cereals, the country is well positioned to service growing regional markets. Similar capital investments have already occurred in Europe following the introduction of new U.S. cereal brands in the early 1990's. In the eyes of many importers, the acquisition of processing technology can be a sound strategy when key, basic inputs, such as grain, can be sourced competitively from a number of exporters, or grown locally as in the case of corn and rice in Thailand. Growth in exports of pancake flour, dough and mixes resumed as the market in Japan continued its expansion. Japan, Canada, and Mexico account for 75 percent of total exports which are now valued at $137 million. * Consists of bulk grains, animal feed, added value grain products, and pet food. Pasta exports (Canada accounts for 75 percent of U.S. exports) grew nine percent to $40 million, but continue to be dwarfed by imports which reached a record $266 million during 1995/96. Imports from Italy of $139 million worth of durum-based pasta products dominate (52 percent) U.S. pasta imports. However, imports of a record $81 million worth of non-durum pasta and noodle products from a range of Asian nations now account for 30 percent of total U.S. pasta imports. United States bakery products exports showed excellent promise and growth in the early 1990's but have now stalled at $368 million after showing marginal growth in the last two years. Canada and Mexico account for $237 million (64 percent) of total exports and Japan adds an additional 5 percent to the total. Export gains through 1992/93 out paced import gains and, for a time, appeared to be poised to eliminate the net trade deficit for the export category. The export slowdown in recent years has not been matched by a similar import slowdown. Imports reached a record $630 million in 1995/96, up 10 percent for the year. As a result, the net trade deficit for the category now exceeds $250 million. Imports from Canada and Mexico accounted for $357 million (56 percent) of imports with an additional $185 million (29 percent) coming from the European Union. Corn products exports reached a new record of $260 million on increases in meal, flour and corn snack exports. Over two thirds of the total $109 million in corn meal and flour exports went to Mexico and Canada. Canada accounted for nearly all of the growth in the $65 million corn snack foods category taking nearly $19 million (29 percent) of all U.S. exports. The market for corn snack foods exports to Asia showed no growth as reduced exports to Japan offset gains elsewhere. Still, the region accounted for over one quarter of U.S. markets for the category. Pet foods registered yet another record export year during 1995/96 at $677 million. U.S. imports of $153 million were also a record. Canada continues to be the major export destination taking $197 million (29 percent) of U.S. exports for the year. The European Union at $183 million (27 percent) and Japan $147 million (22 percent) round out the top destinations for pet foods. Imports from Canada account for two-thirds ($98 million) of pet foods imports. The EU and Thailand virtually split the remaining share of the import market. For more background on U.S. pet food exports, see the December, 1995, issue of this circular series. Exports of barley malt have been relatively stagnant, even with the assistance of EEP, as several important markets move away from finished malt imports and expand their own malting capabilities. Concurrently, malt imports have risen in the 1990's, approaching levels previously reached in the late 1970's. Canada and the U.K. dominate the U.S. import market for malt. For further information, please contact Lee Schatz at (202) 720-5429. SITUATION AND OUTLOOK: COMMENTARY AND CURRENT DATA WORLD WHEAT SITUATION AND OUTLOOK The 1996/97 forecast for a world wheat trade of 90.9 million tons represents a 2.2 million ton increase from last month but remains close to the lowest level of international wheat trade since the 1979/80 season. Generally favorable weather has combined with a greatly expanded planted area to provide a world wheat production increase of 44.3 million tons over last year's crop. Global production will exceed consumption for the first time in four years, allowing for some rebuilding of severely depleted reserves. Nevertheless, stocks are not expected to return to the excessive levels carried in the 1980's when government inventories were extremely large. Exporters With this month's 1.6 million ton increase in the 1996/97 wheat production estimate for Australia, three of the world's five major producers are enjoying crops of record size. Both Australia and Argentina are expected to export record amounts of wheat in 1996/97, increasing combined exports by 10 million tons from last year. Forecast exports from the European Union have been raised by 500,000 tons and are now projected to reach 14.5 million tons. Importers Strong purchasing activity prompted increases of 1.5 million tons and 700,000 tons respectively in the import forecasts for Iran and India. A healthy import pace by Turkey led to a 500,000 ton increase in the projected imports by that nation as well.WORLD RICE SITUATION AND OUTLOOK International rice prices were firm during the month of January with Vietnam being the only major exporter to record significant price decreases. By the beginning of February, however, nominal price quotes out of Thailand had also begun to soften. After increasing by up to $20 per ton during the month of January, quotes for top quality Thai 100B had eased $10 or so during the first two weeks of February. Export quotations for Vietnam softened consistently through the first half of January before stabilizing at about $10 per ton below year end-values. Exporters in Pakistan, which entered the year as the lowest-price source, were content to hold steady on pricing before raising export quotes marginally toward mid-January. In the U.S., robust export sales have combined with lower availability from the 1996/97 crop to drive long grain prices up $25-30 per ton in January. Prices for U.S. long grain are at their highest level since August's pre-harvest run up. Exporters The calendar year 1996 export estimate for Pakistan was raised this month from 1.4 to a record 1.66 million tons. November-December exports were extremely high as Pakistani exporters took advantage of delayed harvests in Thailand and Vietnam to offer deep discounts for importers. The forecast of 1997 exports was lowered to 1.65 million tons, however, as these heavy Nov.-Dec. shipments limit availability from the 1996/97 crop for later shipment. The 1997 export forecast for India was lowered this month from 2.25 to 2.0 million tons. As forecast import demand in South Asia falls and export prices out of India remain uncompetitive, 1997 exports are expected to be significantly slower than in both 1995 and 1996. Extra-regional 1995 exports by the EU are now estimated to be 325,000 tons, versus 250,000 tons a month ago. Likewise, forecast 1997 exports were raised from 200,000 to 350,000 tons as export availability should be similar to that of 1995. Forecast 1997 exports by Argentina were also increased, to a record 550,000 tons, as record production is forecast to top 1.0 million tons. Importers South America Forecast 1997 imports by Brazil were reduced this month from 1.5 to 1.2 million tons, the second highest level ever of Brazilian imports. A quiet domestic market during the month of January lends credence to many in the trade who have maintained that increases in Brazilian rice consumption have slowed significantly in the past couple of years. This decrease in forecast imports, combined with record combined export availability from Brazil's MercoSur trading partners, drastically reduce potential for extra-regional imports by Brazil. The 1997 import forecast for Peru was raised this month from 300,000 to a record-tying 400,000 tons. This increase was prompted by a reduction in forecast Peruvian rice production. 1997 will be the fifth year in the last seven in which Peru's imports total more than 300,000 tons, and the second year in a row in which imports total 400,000. South Asia The calendar year 1997 import forecast for Bangladesh was lowered this month from 500,000 tons to just 100,000. Excellent crop conditions and input availability have contributed to a 750,000 ton increase (rough basis) in the 1996/97 production forecast for Bangladesh, and allow the country to achieve near self-sufficiency after two consecutive years as one of the world's top rice importers. Middle East Calendar year 1997 rice imports by Iraq are now forecast to reach 750,000 tons, up from last month's forecast of 500,000 tons. Under the U.N.'s food-for-oil deal, Iraq has contracted between 350,000 and 400,000 tons of rice imports for shipment in the first half of 1997. It is highly unlikely that Iraq would be capable of importing the full 750,000 tons if political events were to prevent renewal of the oil-for-food plan following the first six months of implementation. Former USSR The calendar year 1996 rice import forecast for Russia was increased this month from 300,000 to 350,000 tons upon receipt of preliminary Russian import data. Additionally, the CY 1997 import forecast was raised from 150,000 to 300,000 tons based on a reduction in forecast 1996/97 Russian rice production and continuation of heavy export sales from India. EU Based on import data recently made available, the 1995 rice import forecast for the EU was increased from 550,000 to 820,000 tons. This total represents only imports from non-member countries. One major development confirmed by the latest available data is the growing importance of imports from Guyana and Surinam, much of it transhipped through the Netherlands Antilles. Owing to the increasing regularity and tonnage of these imports, combined with an evident decline in transhipments by the EU (which are not considered as EU imports) the EU import estimate for 1996 was raised from 600,000 to 800,000 tons and the 1997 forecast raised from 500,000 to 650,000. WORLD COARSE GRAINS SITUATION AND OUTLOOK World trade in corn in 1996/97 is expected to fall moderately from 1995/96 levels, primarily due to increased competition from other feed grains. Forecast 1996/97 U.S. corn exports of 48.5 million tons are four million tons lower than 1995/96 exports and 10 million tons less than 1994/95 exports. China, once the world's second-largest exporter and a net importer of nearly 1.2 million tons in 1995/96, is expected to be a net exporter--for the first time since 1994/95--of 950,000 tons in 1996/97. U.S. export opportunities in Asia in 1996/97 are expected to remain relatively good. World trade in barley is expected to increase significantly in 1996/97. World stocks of barley, while projected to increase from 1995/96 levels, will still be below levels observed two years ago, and well below normal. Projected imports by the Middle East, particularly by the largest feed barley importer, Saudi Arabia, are expected to rebound sharply, due to increased feed demand. Asia continues to be a significant growth market, primarily for malting barley, as their barley imports are projected to increase to record levels in 1996/97. Exporters Other Asia Although there has been no official announcement of a lifting of the export ban (in place since 1994/95), China has re-entered the corn export market with exports forecast to reach one million tons. Southeast Asian countries and the Korea are the expected destinations for these corn deliveries. For the first time since the onset of the export ban, China is forecast to be a net exporter. Since there are many feedlots and compounders in the region that prefer small lots that they can independently finance and utilize, China ships in 10-15,000 ton boats, rather than Panamax vessels. REGIONAL TABLES 1) Includes Canada, Mexico, and the United States. 2) Includes Central America, the Caribbean, and South America. 3) Includes Azores, Cyprus, Iceland, Malta & Gozo, Norway, and Switzerland 4) Includes Albania, Bulgaria, Czechia, Hungary, Poland, Romania, Slovakia, and former Yugoslavia. 5) Includes Bahrain, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, Turkey, United Arab Emirates, and Yemen. 6) Includes Algeria, Egypt, Libya, Morocco, and Tunisia. 7) Includes all other African countries except North Africa. 8) Includes Afghanistan, Bangladesh, Bhutan, India, Nepal, Pakistan, and Sri Lanka. 9) Includes all other Asian countries except South Asia. 10) Includes Australia, Fiji, New Zealand, and Papua New Guinea. OTHER NOTES Unless otherwise stated, stock data are based on an aggregate of differing local marketing years and should not be construed as representing world stock levels at a fixed point in time. Current and historical data on the European Union in this issue refers to the EU-15. Consumption statistics reflect total utilization, including food, feed, seed, and differences in marketing year imports and marketing year exports. This circular was prepared by the Grain and Feed Division, Commodity and Marketing Programs, Foreign Agricultural Service, USDA, Washington DC 20250. Information is gathered from official statistics of foreign governments and other foreign source materials, reports of U.S. agricultural attaches and Foreign Service officers, results of office research, and related information. Further information may be obtained by writing the division or telephoning (202) 720-6219. Note: The previous report in this series was the Grain: World Markets and Trade Foreign Agricultural Service Circular FG 1-97 January 1997. For further details on the world grain production, see World Agricultural Production, Foreign Agricultural Service Circular WAP 2-97 February 1997.