Exporter Situation for Wheat and Coarse
Grains to Diverge
Initial indications point toward 1998/99 achieving the second-largest level of world grain (combined wheat and coarse grains) production. Although record grain consumption is expected, it will likely remain below anticipated production levels,resulting in slightly larger global grain stocks. World grain trade is forecast to be up marginally.
However, projections for wheat and coarse grains differ substantially, particularly for exporters. Rising U.S. corn stocks will push up global coarse grains stocks while foreign exporters' wheat stocks will decline. While the general perception in global markets is that the stocks situation is quite flush, the stocks-to-use ratios for wheat exporters is projected at 18.5 - more than one percent lower than the average of the 1990's. However, coarse grain exporter stocks-to-use ratios are projected at almost exactly the average of the 1990's.
While global wheat trade in 1998/99 is anticipated to be flat year-to-year, there exists a "core" group of countries accounting for over 80 percent of total import demand that is expected to experience continued import growth (see graph at right).
Imports for this group are projected to rise 1.7 million tons in 1998/99, exceeding their average annual rate of 1.5 million tons. For these countries, total utilization has a long-term annual growth rate of 3 million tons, but is expected to grow 5 million tons in 1998/99. Thus, despite expectations of continued minimal imports by China and the former Soviet Union, global import demand is being buoyed by the relatively steady import demand associated with these core countries.
Preliminary indications point toward a 3rd consecutive year of decreased corn import demand in the countries most affected by the Asian currency contagion (see graph below). However, most of the prospective reduction in corn demand in 1998/99 is attributable to increased competition from other feedgrains. Total coarse grain feed utilization in these countries is projected to fall 5 percent in 1998/99, as compared to nearly 14 percent in 1997/98.
For more information on these topics, see the wheat or coarse grains sections of this circular.
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