Last modified: Thursday, November 13, 2003
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March 12, 1997
This report provides the data and tables from the current GRAINS: WORLD MARKETS AND TRADE, PART ONE.
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 324-March 11.
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 April 14.
SITUATION/OUTLOOK
FOREIGN COUNTRIES' POLICIES AND PROGRAMS
WORLD AND U.S. GRAIN OVERVIEW
WHEAT
The forecast for 1996/97 world wheat trade stands at 91.9 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 and for the first time since 1992/93 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 place larger supplies in a time of reduced demand. However, in response to the low availabilities and record prices of the previous year, quality was occasionally sacrificed for increased yield in producing the current crop. While prices have reacted to the abundant harvests by dramatically falling from the record highs reached last spring, they remain historically strong due to uncommonly 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 8.4 million tons, resulting in a 1996/97 global stocks-to-use ratio of 19.6 percent, a small increase from last year's record low ratio of 18.8 percent.
RICE
Forecast world rice trade for 1997 was reduced this month from 18.1 to 17.4 million tons. While the current forecast of world trade is 1.6 million tons lower than estimated 1996 trade and 3.6 million tons lower than 1995's record trade level, it is still the third highest level ever. Key to this month's reduced trade forecast were reductions in forecast 1996/97 production by Thailand and India. Among importers, forecast 1997 purchases are lower this month for China, Indonesia and Iran, while forecast imports by the Philippines are raised from 300,000 to 700,000 tons. While 1996/97 global rice production is still forecast to reach record levels, that production forecast was reduced this month from 559 to 556 million tons. It is now forecast that world rice stocks will fall during 1996/97 after a slight increase in 1995/96.
COARSE GRAINS
Global trade of coarse grains during 1996/97 is forecast at 88.2 million tons, the second lowest of the last five years. 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 rebuild somewhat in 1996/97, but remain at relatively low levels. World stock levels at the end of the 1996/97 season are forecast to increase 16 million tons to109 million tons. The global stocks-to-use ratio is forecast to rise slightly to 12.5 percent, the third lowest on record.
Increasing Demand for Paddy Anchors U.S. Position in Latin Rice Market
Huge rice imports by Indonesia, Japan's minimum access rice purchases and the metamorphosis of China from exporter of low-quality to importer of high-quality rice have all maintained the attention of world rice market aficionados squarely on the Asian market. This would seem only natural as the vast majority of the world's rice is grown, traded and consumed within the crowded confines of South and Southeast Asia. For U.S. long grain rice exporters, though, Asia long ago ceased to be a major market. Unfortunately for these exporters, most of the late 1970's and 1980's were spent searching for foreign markets.
Development of overseas markets in the Middle East, and Europe were vital to creating regular demand for U.S. rice, but it has been increasing demand in Latin America which has had the most profound impact on the U.S. rice industry. Import demand by Latin America has increased fivefold in the last decade, rising from only 600,000 tons in 1988 to a forecast three million tons in 1997. Large and consistent import markets have taken shape in Mexico, Peru, Haiti, Brazil and Central America. In most cases, increasing domestic rice consumption is bolstered by the region's recent strong economic growth. At the same time, transition in the agricultural economies of countries such as Mexico, Peru and Brazil has led to a sustained fall in domestic rice production.
The U.S. enjoys not only large freight advantages in Latin America, but in several markets has substantial tariff advantages as well. However, the single most compelling reason that Latin America has become the cornerstone market for U.S. rice exporters is the growth of U.S. exports of rough (paddy) rice. The United States and Argentina are the world's only significant exporters of rough rice. While Argentina's rough rice exporters are overwhelmingly channeled into the Brazilian market, U.S. rough rice is bought throughout the hemisphere. Exports of U.S. rough rice now account for 16% of total exports and are forecast to clear 7% of total 1996/97 production. The price impact for farmers is far more significant than the rough rice export share in U.S. supply and disappearance would suggest.
Demand for U.S. paddy brings foreign millers into the U.S. market, bidding up paddy prices in direct competition with U.S. millers. It is not for this reason alone, however, that paddy exports are extremely unpopular with U.S. rice millers. It is generally considered that the United States has excess milling capacity, with many mills forced to cut production hours by season's end.
For Latin American importers, paddy imports allow them to keep their excess milling capacity from shutting down. Many U.S. millers see this as proof that rough rice exports are robbing the United States milling industry of business: If Mexican or Central American mills shut down, these countries would have to turn to the U.S. for supplies of milled rice.
The true impact of U.S. rough rice exports would seem to be more complicated than this simple addition and subtraction. Reliance on imported paddy forces Latin American millers to mill and package rough rice from the U.S. at competitive prices. In Mexico, imported paddy now constitutes the majority of rice processed by Mexican millers. In Central America the share of U.S. paddy in total milled output is 25-30%. The need for local millers to process and sell this rice at competitive prices has led national governments to prevent the importation of less expensive rice. Put simply, millers in Mexico and Central and South America cannot mill U.S. paddy and sell at price levels that are competitive with the landed cost of Asian rice. One must question how competitive U.S. milled rice would be in areas such as Mexico and Central America if faced with direct competition from sellers in Thailand and Vietnam.
In 1996 U.S. exports of what might normally be uncompetitive milled rice to Mexico and Central America exceeded 200,000 tons. The ban on Asian rice in many regional markets allows U.S. exporters to establish a presence in rapidly growing markets without serious price competition. This fact is especially significant when one considers the state of the Mexican milling industry, which now mills more U.S.-grown than Mexican-grown rice. Within six years tariffs on rice imports from the U.S. will be eliminated and Mexican millers will have to compete head-to-head with imports of U.S. milled rice; while absorbing the extra cost associated with milling imported paddy.
This scenario presents the very real possibility that a significant portion of the Mexican milling industry will fail. In such a case, the impetus for excluding Asian rice from the Mexican market may disappear. The challenge for U.S. exporters would seem to be preparing for that day. Exports of rough rice are currently the cause of substantial controversy, but are they bad for the U.S. industry? The answer would seem to be "no"-provided the U.S. rice industry can take advantage of its present opportunity to establish consumer loyalty to U.S. rice while Asian competition is shut out.
For further information, please contact Morgan A. Perkins at (202) 720-2231.
North Korea Seeks Food Aid
The US Government (USG) has agreed to contribute roughly $10 million toward a food aid program for North Korea. This action came in response to a UN World Food Program (WFP) appeal for $41.6 million in aid to help North Korea's desperate population. South Korea has also offered a donation in the amount of $6 million. The $41.6 million appeal will purchase roughly 100,000 tons of grain (including corn, rice, and a corn soy blend), which falls short of North Korea's estimated food import needs. based on a 500 grams/person/day diet, North Korea's 24 million people require approximately 4.3 million metric tons (mmt) of grain per year. An additional million metric tons is required for livestock and other uses. Traditionally, North Korea has sourced its grain requirements from domestic production, imports from China and donations from Japan (in 1995 and 1996) and South Korea (1995 only). Domestic production averaged roughly 4.7 mmt over the 1985/86-1996/97 time period, but has fallen off in the 1990s, especially during the past two marketing years. The most dramatic change, however, has been in the domestic stock level so that by 1995/96 there were virtually no stocks on which North Korea could rely.
North Korea faced floods in 1995 and 1996 which reduced output forcing increased imports, decreased consumption and encouraged early consumption of domestic corn before it reached maturity which accentuated the shortfall. The South Korea Rural Development Administration recently lowered its 1996/97 grains production estimate for North Korea from 4.3 mmt to 2.8 mmt.
In order to maintain a an adequate diet North Korea will need to make up for a shortfall of 2.4 mmt. Since the total appeal from the UN will only purchase 100,000 mt, a shortfall of 2.3 mmt remains.
To further bridge this gap, the daily consumption rate will likely fall. Reports out of South Korea already state that the ration for adults has been cut from 500g to 300g/day. The North Koreans could possibly reduce their food requirement by one million tons under this scenario. China has not openly offered a donation. However, China has been North Korea's primary supplier in the past and may provide some relief again. Japan has not yet made a commitment on food assistance, either. Japan reportedly has a large rice surplus available to offer if the Government of Japan so chooses. In the event that Japan offers a portion of its surplus and that consumption in North Korea decreases, the grains shortfall would be reduced but still would fall short of total needs by as much as one million tons. For the remaining amount, North Korea will look to the international commercial market. A case in point is the ongoing barter negotiation between North Korea and US-based Cargill. With little cash and poor credit, though, prospects are not favorable.
For more information, please contact Deanna M. Johnson at (202) 720-4204.
Burma Lowers Sights on Rice Acreage Expansion
It appears that the government of Burma is pulling back from its aggressive efforts over the past four years to increase area and output of a summer, or second, rice crop (planted in Nov./Dec., harvested Mar./May). Government officials, particularly in the Ministry of Agriculture and Irrigation (MAI), have significantly scaled back their stated goals and plans for increasing the area and output of summer paddy. The shift in emphasis may be a tacit recognition that the switch to double cropping in the monsoon season and introduction of a second paddy crop failed to provide a large exportable surplus and may have contributed to a more volatile domestic supply situation.
The second rice crop was introduced on a large scale in the 1992/93 marketing year as a means to increase Burma's rice exports. As recently as December, 1995 government officials confidently predicted at least 4 million acres of second crop rice with output reaching approximately 5 million tons (paddy basis) in 1996.
In a related effort in 1995, Burma's government promoted double cropping the main, or monsoon, rice crop (planted Jun./Aug, harvested Oct./Dec.). These plans were stymied by Burma's weak infrastructure, particularly for irrigation, lack of proper equipment for threshing and drying, inadequate storage facilities, and insufficient supply of quality inputs. In addition, farmers preferred to plant pulses, the traditional second crop, which are better suited for the dry season and are significantly more profitable.
Government officials now forecast that the 1997 second rice crop area will be no more than 2 million acres. The MAI plans to assist farmers in the production of pulses, cotton, and sugar as alternative export crops and will permit farmers to plant according to the market and their own particular agronomic situation. Also, there is less emphasis on double cropping the main rice crop. The FAS office in Bangkok is forecasting that Burma's 1996/97 rice crop will be 16 million tons (13.5 million tons of main crop plus 2.5 million tons of second crop).
Although Burma exported 619,000 tons of rice in 1994 and 645,000 tons in 1995, that level was not sustained last year when exports reached only 265,000 tons. Most analysts believe the higher export volumes in 1994 and 1995 were achieved by drawing down stock levels and not the result of increases in Burma's exportable surplus of rice. The volatility in domestic rice prices is also of concern to Burma's policy makers. According to several officials, the government's current priority is to ensure sufficient rice for domestic needs and export only when there is adequate surplus.
Nevertheless, the lure of foreign exchange earnings is strong and the government's procurement efforts this year belie an interest and intent to obtain quantities of a higher quality rice that can only be used for export.
Prepared by Scott Sindelar, Agricultural Attache, American Embassy, Bangkok, who recently made a field trip to Burma. For further information, call Morgan A. Perkins at (202) 720-2231.
Cuba's Trade Deficit Forces Sharp Reductions in Needed Grain Imports
Just 90 miles off the coast of Florida lies a foreign market whose domestic demand supports well over one million tons of imported wheat per year. Include corn, rice and other cereals and Cuba becomes a one billion dollars annual market for imported grains.
Cuba's foreign trade has a history of being limited to just a few primary partners. Prior to the 1959 revolution the United States supplied 70 percent of Cuba's imports and was the destination for 67 percent of Cuban exports. Following the revolution and subsequent trade embargo in effect by the United States since 1961, Cuba turned to largely exclusive trade with the world's centrally planned economies; by 1988 the U.S.S.R. accounted for nearly identical shares of Cuban imports and exports as the United States had thirty years earlier. With the sudden collapse of the Soviet Union and dissolution of the Eastern Bloc, Cuba simultaneously lost its primary source of subsidized agricultural inputs and its premium export markets. Once again Cuba found itself in need of new partners with whom to carry out vital trade. This need so far has gone largely unfilled.
Although traditionally a net exporter of food and agricultural products, Cuba does rely on a significant amount of imports, primarily temperate zone products which have become staples in the local diet yet cannot easily be produced domestically. Cuba depends upon grain and feed imports even more than others: in 1995/96 Cuba imported all the wheat and about 80 percent of the corn and rice it consumed. However, Cuba's ability to import rests upon its ability to export. Primary products such as sugar, citrus, seafood and nickel must be exported at premium prices to enable Cuba to afford the crucial imports of petroleum products, machinery, food and other inputs necessary to maintain its agricultural output.
For well over a decade exports have not been sufficient to sustain imports at demand levels. Further, Cuba's agricultural sector generally has been in decline since the fall of the Soviet Union seven years ago. Widespread shortages of fuel, tires, spare parts and other mechanical inputs have hindered the preparing of land as well as the sowing, fertilizing and spraying of crops, while the inefficient management of available resources (particularly labor) has had an equally damaging impact on harvesting and on the average yields realized. The resulting lack of export capacity contributed to a multi-year decline in Cuban imports of grain and feed in the 1990's, which in turn led to reductions in the import-dependent cattle-, pig- and poultry-breeding and a consequent decrease in the production of meat, eggs and especially milk. Today livestock herds, much smaller in size than in 1989, graze on unimproved pasture land instead of imported grains and feed.
In 1994, with the hope of boosting agricultural efficiency and reducing extremely high subsidies, the Cuban government dissolved the nation's state farms into production cooperatives. A Cuban producer is now one of about 90 (as opposed to one of about 200) working on a farm and while he still cannot choose which crops to plant he is allowed to keep any surplus which remains after meeting the state requisition. Many farmers now are able to sell their surplus crops and keep the proceeds for themselves. This new system promotes a higher sense of "ownership" and provides other incentives which are designed to increase efficiency.
Sugar has long been Cuba's single most important export product (accounting for over three-fourths of export earnings for more than 30 years) and as such the nation's principal trade source for desperately-needed hard currency. Although the 1996 sugarcane harvest was reported to have increased by 33 percent from the prior year, production levels remain far below those achieved during the 1980's and if anything may be simply rebounding from a steep drop which saw the 1993 season's sugar output at virtually the same level as that of the 1919 season. In addition, world sugar prices are flat while in recent years the prices of both grain and oil have risen dramatically. The depressed production and stagnating price of the island's major export commodity has helped push Cuba's balance of trade deficit to record levels and put a squeeze on the flow of hard currency through the national treasury as Cuba has been forced to rely upon high-interest short-term loans to meet financial obligations. This in turn further erodes Cuba's links to the global economy and, therefore, depresses its ability to meet its grain import needs. While Cuba has sufficient area to increase its own production of rice, corn and other grains, such rotation would require taking acreage out of sugarcane and other export crops, something the government seems unwilling to do so long as these exports remain one of the country's only methods of access to hard currency and foreign trade.
For further information, please contact James Gartner on (202) 690-4130.
Marketing Efforts Help Diversify U.S. Wheat Exports to Peru
Peru's wheat imports from the United States traditionally have been of the Hard Red Winter(HRW) class. This practice was supported by the PL-480 Program, under which Peru was allowed to receive only HRW. Beginning in Fiscal Year 1996, however, PL-480 shipments of wheat to Peru ceased. Since that time, sales of U.S. wheats to Peru have been on a commercial basis. In an effort to bolster commercial sales of U.S. wheat to Peru, the U.S. Wheat Associates (USW), with wheat producer and USDA support, began a technical assistance program with Peruvian wheat millers.
The USW program provided U.S. milling technicians to visit each of the larger Peruvian wheat mills to teach the millers how to utilize the equipment they had on hand to blend different classes of U.S. wheats in order to produce flour with the specifications desired by the end users. Mill purchasing managers also have been trained on aspects of the U.S. grain merchandizing system.
As a result, Peruvian buyers are now able to utilize different classes of U.S. wheats, shipped from different coasts, thus taking advantage of both price spreads between U.S. wheat classes and freight differentials between ports. Another group of U.S. technicians is scheduled to give a course in futures and options trading to further enhance the sophistication and flexibility of the Peruvian buyer in dealing with U.S. wheat and its marketing system.
End users, such as bakers and pasta and cookie manufacturers, also benefit from USW efforts by receiving a more consistent flour with which to manufacturer and improve their products. With good economic growth in recent years, the Peruvian consumer is demanding an increasingly diverse selection of wheat products. For example, cookie consumption has increased nearly 50 percent over the past two years.
The success of the USW program is demonstrated by the export statistics. While Hard Red Winter is still the U.S. wheat most commonly imported by Peru, Hard Red Spring has taken a strong second position, and imports of Soft Red Winter and Soft White wheats are beginning. These latter three classes now comprise around 40 percent of U.S. wheat exports to Peru, which have risen significantly during the past two years.
While very strong competition from Argentina and Canada is expected to continue, U.S. wheats now have a broader "base" in the Peruvian market, thanks to USW's aggressive marketing efforts.
Prepared by Daryl Brehm, Agricultural Attache, American Embassy in Lima, Peru. He can be reached by phone on (011-51-1) 434-3042.
WORLD WHEAT SITUATION AND OUTLOOK
While the 1996/97 forecast for world wheat trade was raised by 1.0 million tons this month, the total world trade of 91.9 million tons represents a drop of 1.2 million tons from the previous year and nearly 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 44.5 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
The significantly reduced United States presence in the world market this year, coupled with the fact that three of the world's five traditional suppliers produced crops of record-breaking sizes, has resulted in an exceptionally competitive export climate throughout the 1996/97 season. However, a recent tightening in the amount of wheat available for export has pushed global prices higher over the past month. Following successful marketing campaigns, Argentina and Australia, together the most aggressive suppliers and world price-setters over the past three months, have each sold record amounts of wheat into the international market. In Australia export capacity reportedly now is full through April, while in Argentina sales have reached approximately four-fifths of the total export estimate and are expected to slow dramatically for the balance of the year. Meanwhile, ongoing logistical problems in Canada continue to severely curtail exports (as they have all during the winter period), creating a backlog which is expected to take weeks to work through. As a result, it has been announced that in Canada as well further sales would not be made for shipment before the end of April. As the world's current lowest-priced source of wheat, the European Union is expected to benefit from this lull in activity and as such its export forecast has been increased by 1.0 million tons.
Importers
As the season moves into its final months it has become evident that in some nations the plentiful wheat crops harvested in 1996/97 came about at the expense of quality, while in others, producers, mindful of the spectacular run-up in price which followed the 1995/96 harvest, have been reluctant to market their wheat. As a result, global import demand has been somewhat stronger than generally anticipated at the season's outset as governments and private purchasers turn from domestic producers to the more favorable pricing and quality supplies available on the international market.
In Iran, a low government procurement price and heavy on-farm feeding of the second poor-quality wheat crop in as many years has resulted in an import level which is forecast to reach a record 6.0 million tons, up another 1.0 million tons over last month's increase and double the prior year's amount. Iran now is expected to rank among the top three importers of wheat in the world for the 1996/97 season.
A reduced demand for feed and increased demand for high quality milling wheat led to heavy imports by buyers in Poland ahead of an expected tariff reinstatement this past January. As a result, the import forecast has been increased by 360,000 tons, to an even 1.0 million tons. The substantial imports will allow Poland to build stocks and stabilize domestic prices.
WORLD RICE SITUATION AND OUTLOOK
International rice prices showed differing tendencies in February. While prices eased in both Thailand and Vietnam, they firmed slightly in Pakistan and the United States. The strongest price movements in February were registered in Thailand. Nominal quotes for higher grades were off $15 or more per ton while price quotes for lower and intermediate grades fell up to $10 per ton. In Vietnam, prices also eased, by about $5 per ton, as significant sales to the Philippines have buoyed the market. Pakistani price quotes were up on heavy loadings, hopes of garnering a substantial share of optional-origin purchases by the Philippines and recent heavy buying by multi-national firms. Meanwhile, the U.S. long grain market has continued to climb with prices up $10-15 per ton during the month of February before several weeks of slow sales led to a slight decline in quoted price levels. U.S. medium grain prices fell slightly at the end of the month as shipments to Japan were completed and buying interest is limited while a large new crop is soon to hit the market in Australia.
Exporters
The calendar year 1997 export forecast for Thailand was reduced this month from 5.5 to 5.0 million tons following a reduction in forecast Thai production from 21.8 to 21.1 million tons. It is believed that much of this decrease in production (down from 21.8 million tons in 1995/96) was due to adverse weather conditions in Northeast Thailand and that production of higher quality and fragrant varieties will be disproportionately affected.
Exports by India during calendar year 1997 are also forecast to be lower, at 1.5 million tons versus an earlier forecast of 2.0 million tons. A reduced forecast of 1996/97 rice production by India combined with more aggressive pricing by other major exporters should limit the ability of India's exporters to penetrate non-traditional markets.
Forecast 1997 exports by Burma were reduced this month from 500,000 to 150,000 tons- the lowest yearly total since USDA began tracking Burma's exports in 1964. Burma's 1996/97 rice production is now forecast at 16 million tons, down 2 million tons from last month's forecast and 1.2 million tons below 1995/96's record production. Lower production, tight domestic stocks and a glut of low quality rice available from other, more reliable, sources make any substantial Burmese exports unlikely in 1997.
The 1997 forecast of rice exports by China was raised this month from 250,000 to 750,000 tons. After being the world's second largest rice importer in 1995, two good harvests have resulted in an increase in available supplies. In addition, domestic rice prices in China have fallen steadily since harvesting of the 1996/97 main crop, now making Chinese rice extremely competitive on the international market.
Crop development has proved excellent in Uruguay, where the 1996/97 crop is now expected to reach 900,000 tons, allowing 1997 exports to reach 550,000 tons, the second consecutive year at this level.
Importers
Other Asia
The 1997 import forecast for Indonesia was cut this month from 1.0 to 1.5 million tons. First quarter 1997 imports of 3-400,000 tons put the government logistics agency (BULOG) in a position to more effectively manage stock levels through importation in late 1997. These moderate early imports are in stark contrast to 1995 when import delays led to seriously depleted stock levels and massive overbuying late in the year. While additional imports will be necessary, a controlled drawdown (500,000 tons from year to year) of ending stock levels is forecast.
Following a spate of recent buying, the 1997 rice import forecast for The Philippines was raised this month from 300,000 to 700,000 tons. These recent Philippine purchases (of 500,000 tons with options for up to 300,000 tons more) have played a major role in supporting prices in an otherwise dull world rice market.
Rice imports by China are now forecast to reach 800,000 tons in 1997. While lower than 1996 imports estimated at 850,000 tons, 1997 imports are expected to be comprised almost exclusively of higher quality grades. The majority of 1996 imports into China were of high quality and fragrant grade, although substantial lower quality shipments were also received early in the year. Damage to Thailand's fragrant crop and resultant high prices are expected to limit growth of China's imports of Jasmine rice.
Middle East
The 1997 import forecast for Iran was lowered this month from 1.2 to 1.0 million tons. Recent low levels of Iranian purchasing are expected to persist in coming months. As in the case of China, lower 1996/97 Thai production is expected to impact most heavily the exports of high quality rice preferred by buyers such as Iran.
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. However, U.S. export opportunities in 1996/97 are expected to remain relatively good. The 1996/97 forecast for U.S. corn exports of 48.5 million tons is four million tons lower than 1995/96 exports and 10 million tons less than in 1994/95. 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 nearly one million tons in 1996/97.
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 three years ago. 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 barley imports there are projected to increase to record levels in 1996/97.
Importers
Other Asia
Japan, a major U.S. corn market, is expected to import 250,000 tons less corn in 1996/97 than was previously forecast, at 15.5 million tons. This is the lowest corn import level in the last 10 years. The United States has already sold nearly 10 million tons of corn to Japan this marketing year. However, estimates for sorghum imports are up 250,000 tons, to 3.25 million tons. This would represent the largest sorghum import level in Japan since 1991.
This month USDA has substantially revised the production, supply, and demand data series for barley in China. China has emerged as one of the world's largest importers of malting barley, as beer consumption in China has risen dramatically over the past few years. However, barley production and stocks have fallen steadily since peaking in 1988/89.
In China, the Council of Light Industries (CLI) is responsible for overseeing the brewing industry, and it is awaiting the approval of a plan which may limit the ability of joint venture breweries to gain further market share. The proposal would cap the beer output of these breweries at 30% of total production in the country, and would cap the volume of foreign labeled beers at 10% of total sales. Currently, there are over 50 joint venture breweries which now take a 20% share of total production with foreign labeled beers at 3%. The proposal under consideration calls for a moratorium on 100% foreign invested breweries, and the requirement that any foreign invested joint venture brewery d have to export 20% of their sales volume if they wish to market foreign labeled beers.
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 2-97 February 1997. For further details on the world grain production, see World Agricultural Production, Foreign Agricultural Service Circular WAP 3-97 March 1997.
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