FOREIGN COUNTRIES' POLICIES AND PROGRAMS
Aggressive Pricing Raises Specter of Competition From Ukrainian Grain Exports
Ukraine has natural advantages as a grain producer and exporter because of its fertile lands and strategic location which provides ready access to expanding Mediterranean markets. In the Soviet era exports went mainly to neighbors, particularly Russia, but a more open economy has allowed it to emerge as a new player on world markets. In 1997/98, grain exports are estimated at over a million tons, half of which are destined outside the FSU.
Ukrainian barley has already made a dent in traditional EU markets, and its wheat and corn have the potential for large future gains. Aggressive pricing enabled it to sell several hundred thousand tons of barley to Saudi Arabia and Mediterranean countries, which pushed the EU to boost its export subsidy by 50 percent to over $50/MT in order to compete with those lower prices.
However, they must overcome quality and logistical problems to be recognized as a regular, or at least reliable, grain exporter. Inadequate port facilities and transport bottlenecks have already cost them additional export sales, which were lost to more efficient Baltic ports. Recent parliamentary elections, that resulted in a setback for reform, will likely delay progress on solving these problems even further.
For further information, please contact Jay Mitchell at 202-720-6722.
United States-Canada Grain Trade Up Again in 1997
The total value of grain and grain products(1) trade between the United States and Canada has increased for the eighth straight year, reaching $2.7 billion in calendar year 1997 (CY97). Canada increased sales by 9 percent to $1.63 billion while the United States boosted export earnings by 5 percent to $1.08 billion. Export earnings for both countries are at least three times the pre-Canada-U.S. Free Trade Agreement level of 1989.
In both value and quantity terms, Canada's export engine is fueled by wheat, pet food, miscellaneous grain products (consumer items such as breakfast cereals and bread), barley and oats. In CY97, one third, or 2.2 million metric tons (mmt), of total Canadian grain and grain products exports were wheat. Due to relatively strong wheat prices in CY97, total export earnings increased by $114 million, more than for any other category. Pet food posted record export earnings, too, with total sales of $317 million. Canada continues to successfully export oats and barley to the United States. While oat exports still surpass barley exports in quantity (in fact, barley exports have declined in quantity since 1994), barley is catching up in dollar terms. In CY97, 861,042 mt of barley imports were valued at $125 million versus 1,521,372 mt of oats valued at $193 million. The United States imports mostly high value malting quality barley.
For U.S. grain and grain products, value-added grain products provided the greatest export revenue in CY97. Leading the pack was the "miscellaneous" category (consumer items like breakfast cereals and bread), with $416 million in total sales to Canada. U.S. pet food exports are a close second, reaching a high of 587,017 mt ($339 million) in CY97. United States-Canada reciprocal trade in pet food was roughly equal in CY97, but given rapid export growth in the last ten years it is reasonable to expect U.S. pet food exports to surpass imports in the future. In terms of volume, corn is the leading U.S. export to Canada, 1.03 mmt in CY97 and growing. Corn also ranks as a top revenue source, with sales of $119 million.
For further information please contact Deanna Johnson at (202) 720-4204.
1. "grain" includes: wheat, rice, rye, barley, oats, sorghum, corn, dried beans, dried peas, lentils and "grain products" includes: wheat flour, wheat products, coarse grain products, feed ingredients and fodder (pet food), miscellaneous (breakfast cereals, bread)
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