WORLD COARSE GRAINS SITUATION AND OUTLOOK
World trade in coarse grains during 1998/99 is forecast to be 88 million tons, a 1.6 million ton increase over the 1997/98 level. World production of coarse grains is expected to rise to the second highest level ever, 907 million tons. Strong growth in corn production, especially in China, the United States and Brazil, is projected to offset lower barley production, while production for other coarse grains remains stable. Total world coarse grain stocks are projected to rise 4 million tons in 1998/99, to 131 million, with a nine million ton increase in U.S. corn being partially offset by a five million ton drawdown in Chinas corn stocks.
A near-record coarse grain harvest, is expected to provide ample supply for continued strong growth in consumption, forecast at a record 903 million tons. World trade in corn is forecast to fall slightly in 1998/99, down 1.0 million tons to 61.4 million. Corn imports by east Asian nations are forecast to decline for the fourth consecutive year, while demand grows in Latin America and the Middle East. Global demand for barley is forecast to rebound to 16.1 million tons in 1998/99, thanks largely to increased demand for feed barley in Saudi Arabia. Trade in rye is expected to nearly double in the coming year as the EU will likely force excess stocks onto the world market, displacing other feed grains, particularly corn. World trade in sorghum and oats are expected to be little changed in 1998/99.
In the face of continued strong competition and sluggish import demand, corn exports from the United States are forecast up 2.5 million tons, to 40 million in 1998/99. U.S. exports of barley and sorghum are expected to decline as markets are lost to subsidized exports of barley and rye from the EU. Following this years surge in intervention stock levels and price declines affecting all coarse grains, the EU is expected to be an aggressive seller in 1998/99. Exports of barley are projected to rise from 3.5 million tons in the current year to 6.0 million tons, while rye exports are forecast to jump from 600,000 tons to 1.5 million. Despite the year-to-year growth in net coarse grain exports from 2.5 to 5.7 million tons, EU coarse grain stocks are forecast to continue their rise, ending the year at 25.1 million tons, up 2.1 million.
Corn exports by China are forecast to continue in 1998/99 as Chinas grain stocks strain storage capacity. Total corn exports are initially forecast at 4.0 million tons, which, combined with projected growth in feed demand, will draw down corn stocks by 5.0 million tons, easing pressure on storage facilities. Nonetheless, combined wheat and coarse grain stocks are projected to end the year virtually unchanged, at 59.2 million tons (versus carry-in stocks of 60.8 million).
The second highest coarse grain crop in its history is expected to ensure that Argentina continues to challenge U.S. exports worldwide, with corn shipments forecast steady at 13 million tons in 1998/99. With further improvements in grain handling, storage and processing facilities, Argentina is set to cement its position as a steady, year-round supplier in the world coarse grain market.
Coarse grain imports are expected to continue at the modest levels seen in recent months. Total coarse grain imports by the region are forecast to fall by 1 million tons (to 38.3 million) in 1998/99. Among major buyers, imports of corn by South Korea are expected to reach only 6.5 million tons (down from 7.5 million in the current year), the victim of both softer feed demand and increased competition from alternate feed grains, notably rye.
Coarse grain imports by both Japan and Taiwan are likewise forecast to fall, but slightly (down 300,000 and 250,000 tons respectively) as feed demand continues to decline in each of these markets.
Elsewhere in the region, Indonesia is projected to continue modest corn exports, while imports by China, Thailand and the Philippines remain at 1997/98 levels. Imports by Malaysia are forecast to increase slightly in the coming year, up 200,000 tons (to 2.3 million), as feed demand begins to recover from depressed 1997/98 levels.
Barley imports by Saudi Arabia are forecast to increase to 5.5 million tons in 1998/99. Current year imports, estimated at 4.5 million tons, were limited as widespread rains boosted production of forage crops, reducing demand for imported feedgrains.
Corn imports by Brazil are projected to double in 1998/99, to 1.5 million tons. Poor 1997/98 production, particularly in the Northeast, has created the need for stepped up imports.
Imports of corn and sorghum by Mexico are forecast to continue strong in 1998/99, at 3.5 and 2.7 million tons respectively. Despite increased local production, strong imports will be necessary to support growth in Mexican feed consumption.
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