EXECUTIVE SUMMARY

SITUATION/OUTLOOK

• The 1998/99 wheat export forecast for the United States is reduced by 1 million tons, to 30 million tons due to increased competition and lower global demand.

• The 1998/99 wheat import forecast for Pakistan is lowered 1 million tons to 2 million tons based on higher production prospects.

• The 1998 rice import forecast for Indonesia is raised to 5 million tons as Bulog, the country’s rice import monopoly, continues large purchases on the international market.

• Barley exports by the EU are estimated 500,000 tons higher for both the 1997/98 and 1998/99 years (to 4.0 and 6.5 million tons respectively) as reduced competition is expected to draw more European barley into the market.

• The 1998/99 wheat export forecast for Australia is projected 1 million tons higher (to 15 million tons) due to an expected larger crop. However, extremely low carry-in stocks in Canada suggest a 500,000 ton reduction in projected exports to 16 million tons.

• The 1998 rice export forecasts for China and India are each raised to 2.5 million tons due to production increases for both of these countries.

• Mexico’s 1997/98 imports of both corn and sorghum are estimated higher (each by 300,000 tons, to 4.0 and 3.0 million tons respectively) based on recent strong purchases.

• 1997/98 corn imports by the Philippines are estimated at 500,000 tons, up from 250,000 tons, as rising local prices make imports profitable despite high tariffs.

FOREIGN COUNTRIES' POLICIES AND PROGRAMS

• Australia’s joint wheat milling venture plants them squarely in the Egyptian market.

• Romania is showing some signs of progress in an effort to achieve regular grain export status.

• U.S. corn producers have been kept out of the Iberian market by slow action on GMO issue.

• The Canadian Wheat Board finds ways to compete in the world’s grain markets.

   

 WORLD AND U.S. GRAIN OVERVIEW

WHEAT

Global wheat trade in 1998/99 is projected at 98.2 million tons, 1 million tons lower than the 1997/98 level. World production is forecast to be 599 million tons, down 11 million tons from the 1997/98 record. Significant crop decreases are expected to occur in the United States and Argentina. The European Union is expected to harvest record-breaking crops and Australia’s crop is projected up 1.5 million tons. However, Canada’s crop is forecast near the 1997/98 level. Production is up in several key import markets, including most of North Africa, Iran, and Pakistan, while the wheat crop in the former Soviet Union is expected to return to a more usual level. Global consumption is forecast to reach record levels and for the first time in three years, is projected to exceed production, drawing down ending stocks by 2.1 million tons. The global stocks-to-use ratio is expected to be slightly lower at 22 percent.

RICE

Global rice trade in calendar year 1998 is forecast at a record 23.3 million tons, a 4.5 million ton increase over the previous year. The tremendous level of trade is led by an unprecedented 5 million tons of expected demand from Indonesia, where El Nino-related drought delayed and reduced the 1997/98 main crop. Production shortfalls have also been experienced in the Philippines, Bangladesh, and throughout most of Latin America. However, record crops in Thailand, China and India more than offset the declines, boosting estimated 1997/98 world production to a record 567 million tons (rough), and allowing these countries to increase exports. The United States and Vietnam are also expected to increase exports in 1998, and Japan is emerging as a major exporter of rice as food aid.

COARSE GRAINS

World trade in coarse grains is estimated at 87.8 million tons in 1997/98, up from the previous estimate of 86.5 million. Most of this increase is expected in the corn market, with trade now estimated at 62.9 million tons (up 700,000 tons) while smaller increases are made for barley (up 300,000 tons to 14.5 million) and sorghum (up 100,000 to 6.9 million tons) trade estimates. Projected 1998/99 trade is unchanged at 88.1 million tons. Overall 1998/99 world production of coarse grains is largely unchanged at 907 million tons, 1 million tons below the 1996/97 record. Forecast global consumption, while still a record, is down 2.5 million tons in 1998/99 (to 900 million).

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Last modified: Thursday, November 13, 2003