EXECUTIVE SUMMARY

SITUATION/OUTLOOK

• U.S. wheat exports in 1998/99 are projected at 31 million tons, 1.5 million tons higher than last month’s estimate and 1998/99 U.S. corn exports are forecast up 500,000 tons to 42.5 million tons, based on food aid donations and concessional sales under P.L. 480, Title I to Russia.

• Russian wheat imports in 1998/99 are forecast at 3.7 million tons, 1.7 million tons higher than last month’s estimate, and forecast Russian corn imports are up 500,000 tons in 1998/99 to 650,000 tons due to food aid donations/concessional sales by the United States.

• The 1998/99 wheat export forecast for Australia is lowered 1 million tons, to 15.5 million tons based on smaller production prospects.

• Projected barley exports from the EU are up 1.0 million tons to 7.25 million tons in 1998/99 due to an expected increase in demand by Saudi Arabia, where imports are forecast up 1.0 million tons to 5.0 million tons.

• The 1998 and 1999 rice export forecasts for China are raised to 3.3 million tons and 1.25 million tons, respectively, due to continued strong exports and forward commitments.

• Canadian wheat exports in 1998/99 are forecast 500,000 tons lower (15.0 million tons) due to slow shipments to date.

• The 1998 rice import forecast for Indonesia is increased to 5.9 million tons, and the 1999 forecast is raised to 2 million tons.

• Wheat imports by Iraq in 1998/99 are projected at 2.5 million tons, a decrease of 500,000 tons due to lower-than-expected purchases over the last few months.

• The rice import forecasts for the Philippines are increased to 2.2 million tons for calendar year 1998, and 1.2 million tons for calendar year 1999.

FOREIGN COUNTRIES' POLICIES AND PROGRAMS

• The Latest Chinese Grain Reform Will Do Little to Solve the Country’s Agricultural Problems.

• The Reduction in Yemeni Consumer Subsidies Has Not Reduced Demand for Wheat Imports.

• New Port Facilities in the Black Sea Will Provide a Boost for the Region’s Grain Exports.

• Declining Philippine Farm Output Prompts a Development Agenda for the New Administration

 WORLD AND U.S. GRAIN OVERVIEW

WHEAT

Global wheat trade in 1998/99 is projected at 97.7 million tons, over 2 million tons lower than the 1997/98 level. World production is forecast to be 588 million tons, down 23 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 3 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 13 million tons. The global stocks-to-use ratio at 20.6 is down 3 percentage points from a year earlier.

RICE

Global rice trade in calendar year 1998 is forecast to reach a record 25.5 million tons, a 6.5 million ton increase over last year, and 4.5 million tons more than the previous record. The surge in trade is due to crop shortfalls in Indonesia, the Philippines, Bangladesh, and throughout much of Latin America that greatly increased import needs. Meanwhile, record crops in Thailand, China and India propelled world production to a record level as well, allowing these exporters to increase shipments to help meet the huge demand. Increased exports have also been available from the United States and Vietnam, and Japan has taken the opportunity to reduce its burdensome stockpile by exporting a large quantity of rice as food aid. In 1999, trade is projected to fall to 21 million tons as production is expected to rebound in most of the importer countries that are driving 1998 trade. However, world production and stocks are projected to fall sharply, primarily due to a smaller crop in China.

COARSE GRAINS

Global coarse grains trade is predicted to rise to 87.7 million tons in 1998/99, up from the 1997/98 forecast 86.9 million tons. World coarse grain production in 1998/99 is forecast to be 883.9 million tons, declining almost 2.0 million tons from the 1997/98 projected level. Despite the forecast decrease in production, stock estimates are expected to rise in 1998/99, up 4.3 million tons from the 1997/98 estimate. Global consumption is expected to reach 879.6 million tons in 1998/99. Although declining 800,000 tons from last month, global coarse grains consumption is still forecast above the 1997/98 level of 877.2 million tons.

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Last modified: Thursday, November 13, 2003