EXECUTIVE SUMMARY

SITUATION/OUTLOOK

• Projected corn exports from the United States are up 1.0 million tons for 1998/99 to 42.0 million tons.

• The 1998/99 wheat export forecast for Argentina is lowered 1 million tons, to 7 million tons based on smaller production prospects.

• The 1998 rice export forecast for India is raised to 3.5 million tons due to continued heavy exports, primarily to Bangladesh.

• Argentina corn export estimates are reduced 1.0 million tons to 13.0 million tons for 1997/98 due to an earlier slowdown in the export pace than expected and down 1.5 million tons for 1998/99 to 10.5 million tons because of reduced production prospects.

• Indonesian wheat imports in 1998/99 are forecast 500,000 tons lower (3.0 million tons) due to slow commercial purchases to date.

• The 1998 rice export forecast for China is raised to 2.75 million tons. Despite the recent flooding in Southern China, export shipments have continued at a strong pace.

• European Union barley export projections are up 750,000 tons for 1998/99 to 6.25 million tons, owing to recent Chinese purchases and reduced Canadian competition.

• The rice import forecasts for Bangladesh are raised to 1.5 million tons for calendar year 1998, and 750,000 tons for calendar year 1999. Production losses due to flooding are expected to result in increased exports in late 1998 and early 1999.

• Wheat imports by Bangladesh in 1998/99 are projected at 1.9 million tons, an increase of 700,000 tons due to pending donations through the World Food Program, including those by the United States.

FOREIGN COUNTRIES' POLICIES AND PROGRAMS

• Economic Reforms in Poland Have Stimulated Feed Grain Use as Well as Output

• Thailand's Corn Imports Fade as Production Rises and Its Livestock Industry Falters

• Under NAFTA, U.S. Grain Trade with Mexico and Canada Has Almost Doubled

 WORLD AND U.S. GRAIN OVERVIEW

WHEAT

Global wheat trade in 1998/99 is projected at 98 million tons, over 2 million tons lower than the 1997/98 level. World production is forecast to be 591 million tons, down 21 million tons from last year’s record. A decrease of 4 million tons is expected in Argentina, while Canada’s crop is forecast nearly 1 million tons below the previous year’s level. A record harvest (over 103 million tons) is expected in the European Union while Australia’s crop is projected up 4 million tons and production in the United States is forecast to exceed last year’s bumper harvest by almost 1 million tons. Lower import demand is mostly attributed to higher production in several key import markets, including most of North Africa, Iran, and Pakistan. 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 more than 11 million tons. The global stocks-to-use ratio at 21 is down almost 2.5 percentage points from a year earlier.

RICE

Global rice trade in calendar year 1998 is forecast to reach a record 24.9 million tons, a 6 million ton increase over last year, and 4 million tons more than the previous record. The surge in trade is largely demand driven, as crop shortfalls in Indonesia, the Philippines, Bangladesh, and throughout much of Latin America have greatly increased import needs. However, record crops in Thailand, China and India have allowed these exporters to increase shipments to help meet the huge demand. The United States and Vietnam also have large exportable supplies available, and Japan has emerged as a major provider of rice as food aid. In 1999, trade is projected to fall to 20.4 million tons as production is expected to rebound in several of the importer countries that are driving 1998 trade. However, world production and stocks are projected to fall sharply in 1998/99, primarily due to a flood-reduced crop in China.

COARSE GRAINS

Global coarse grain trade for 1998/99 is forecast at 86.5 million tons, nearly unchanged from the 1997/98 forecast 86.9 million tons. Stock estimates for 1998/99 are up 2.5 million tons from 1997/98, with projected coarse grain stocks building most heavily in the United States’ corn stocks and European Union barley stocks. World coarse grain production is predicted to be 883 million tons in 1998/99, down 6 million tons from 1997/98. Coarse grain consumption is now forecast to fall marginally in 1998/99. This predicted downward trend in coarse grain consumption is due to: forecast slower feed growth in China, reductions in feed use in South Korea and production shortfalls in Eastern Europe and the former USSR countries.

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Last modified: Thursday, November 13, 2003