FAO/GIEWS - Food Outlook, November 1997

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1/ World trade in wheat and coarse grains is based on and expressed in estimated imports delivered through June 30th of the July/June trade year. Some late-season purchases may be included in the next season if deliveries occur after June 30th. In general, cereal exports and imports are calculated on the basis of estimated shipments and deliveries during the trade season and thus they may not be equal for any given year due to time lags between shipments and deliveries.

The forecast for global trade in cereals in 1997/98 has been raised by 1 million tons to around 202 million tons since September (Table A.2). At this level, world imports of cereals would be 4 million tons, or 2 percent, above the previous year’s reduced volume. This month’s revisions take into account higher expected imports of coarse grains and rice, which in total would more than offset downward adjustments to the anticipated imports of wheat.

The forecast for global wheat imports in 1997/98 (July/June) has been lowered by 1 million tons to 93 million tons. At this level, imports would be close to the revised estimate for 1996/97. All of the reduction in this month’s forecast reflects lower estimates for some developing countries in Asia. Total imports by the developing countries are currently expected to approach 76 million tons, over 3 million tons more than last year and also slightly higher than in 1995/96. By contrast, aggregate imports by the developed countries are expected to fall to 17 million tons, or 3 million tons less than last year.

Unchanged from last month, the forecast for total wheat imports into Africa remains at a record volume of 21 million tons, up 3 million tons, or 17 percent, from the 1996/97 season. Imports by most countries in northern Africa are likely to rise this year, mainly due to drought-reduced harvests. In Algeria, badly hit by drought, imports are likely to exceed 4 million tons. Egypt is forecast to import 7 million tons, thus remaining the world’s largest wheat importer for the second consecutive year. By contrast, wheat imports to most other countries in Africa are forecast to remain the same or decline slightly from last year.

In Asia, the forecast for total wheat imports in 1997/98 has been cut to 47 million tons, down 1 million tons from last month and also last year. This month’s downward revisions concern mainly the forecast for imports by India and the Islamic Republic of Iran. In India, following the Government’s recent decision to stop imports because of favourable domestic procurement and also a bumper crop, the forecast for this year’s imports is reduced to 1.2 million tons, down 800 000 tons from last month and 500 000 tons less than last year. The forecast for wheat imports by the Islamic Republic of Iran has also been reduced, by 500 000 tons to 5.3 million tons, though still the second highest volume on record after last year’s peak of 6.8 million tons. By contrast, the forecast for imports by the Republic of Korea has now been raised to 3.5 million tons, up 300 000 tons from last month but still 400 000 tons below last year. This increase in imports from last month takes into account this year’s large global availability of low quality wheat which could, to some extent, substitute for maize in animal feed.

Wheat  Coarse grains  Rice (milled)  Total 
1996/97  1997/98  1996/97  1997/98  1997  1998  1996/97  1997/98
( . . . . . . . . . . . . . . . . . . . . . . . . . . million tons . . . . . . . . . . . . . . . . . . . . . . . ) 
Asia  47.3  46.9  55.6  58.2  8.9  9.9  111.8  115.0
Africa  17.8  20.9  8.5  9.3  4.0  4.0  30.3  34.2
Central America  4.7  4.5  8.3  8.4  1.3  1.3  14.3  14.2
South America  10.5  10.8  4.8  6.0  1.6  1.6  16.9  18.3
North America  2.5  2.7  3.4  3.6  0.6  0.6  6.5  6.8
Europe  6.8  4.6  6.4  4.2  0.9  1.0  14.1  9.7
CIS  2.7  2.4  0.3  0.1  0.4  0.4  3.4  2.8
Oceania  0.5  0.4  0.2  0.2  0.3  0.3  1.0  0.9
WORLD  92.8  93.0  87.5  90.0  18.0  19.0 1/  198.2  202.0
Developing countries  72.7  75.9  54.6  58.9  14.9  15.8  142.3  150.5
Developed countries  20.0  17.1  32.9  31.1  3.1  3.2  56.0  51.4

1/ Highly tentative.

Wheat imports into Europe are expected at 4.6 million tons, unchanged from last month, and down over 2 million tons from the previous year. Most of this decline is expected in eastern Europe and that mainly because of bigger crops in several of these countries, particularly in Bulgaria, Poland, the Czech Republic and Romania. In the CIS, the upturn in the 1997 wheat harvest is also expected to result in smaller imports than in the previous year, although the forecast has been raised slightly this month to 2.4 million tons.

Imports into Latin America and the Caribbean are forecast at around 15.3 million tons in 1997/98, unchanged from the previous forecast and slightly up from last year. In Brazil, this year’s imports are anticipated to increase by about 200 000 tons to 5.7 million tons, mainly in anticipation of a 12 percent cut in 1997 production. By contrast, imports by Mexico could decline slightly, while for most other countries, this year’s purchases are likely to remain at around the same levels as in 1996/97.

As regards export prospects in 1997/98, shipments from nearly all the major wheat exporting countries are likely to be smaller, with the exception of the United States (Table A.4), mainly reflecting reduced domestic production. A more positive outlook is in prospect for some smaller exporters (Table A.3), particularly Hungary and Romania. In Hungary, the Government has continued to issue export licences for the new 1997 crop since the beginning of the season and in early October announced that it may give subsidies in order to export the surplus wheat.

The forecast for world coarse grain imports in 1997/98 (July/June) has been raised by 1 million tons from last month to 90 million tons. At this level, global imports of coarse grains would be about 3 million tons, or 3 percent, above the previous year. Total imports by the developing countries are currently put at around 59 million tons, over 4 million tons more than in 1996/97 but the same as in 1995/96. However, aggregate imports by the developed countries are forecast to fall for the sixth consecutive year to 31 million tons in 1997/98. Most of the anticipated rise in global coarse grain imports in 1997/98 would be accounted for by a rise in maize trade which is tentatively forecast to reach 64 million tons, up 2 million tons, or 4 percent, from last year.

Total coarse grain imports into Africa in 1997/98 are currently put at 9.3 million tons, up 1 million tons from the estimated imports in 1996/97. The increase is almost entirely due to higher import demand by several countries in northern Africa because of reduced domestic barley and maize crops. In Asia, coarse grains imports are expected to reach 58 million tons, 2.6 million tons more than the previous year and 1 million tons more than was reported in September. The increase in this month’s forecast mainly reflects upward adjustments to barley imports by Saudi Arabia and maize imports by China which more than offset downward revisions to maize imports by the Republic of Korea.

In Europe, aggregate coarse grain imports in 1997/98 are currently forecast at around 4 million tons, more than 2 million tons below last year. Although the forecast for maize imports by the EC has been raised this month by about 300 000 tons, total coarse grain imports by the EC would still remain below last year due to an anticipated bumper crop and large domestic availabilities of lower quality wheat. In addition, this year’s purchases by Bulgaria and Poland are also forecast to decline sharply due to larger crops. Unchanged from the previous report, imports by the CIS are forecast at 200 000 tons, slightly down from last year, and an insignificant volume compared to earlier years. Imports into Latin America and the Caribbean are currently put at 14.4 million tons, down 400 000 tons from last month and 1.3 million tons from the previous year. While the forecast for maize and sorghum imports by Mexico is slightly lower this month, imports by most countries in South America are forecast to remain the same or exceed last year’s levels. Maize purchases by Brazil are forecast to more than double mainly due to strong domestic and export demand for poultry meat.

Regarding exports, with the exception of Australia, coarse grain shipments in 1997/98 from all the major exporting countries are likely to remain close or even exceed the previous season’s levels (Table A.4). The most significant increase is expected in the United States, mainly on account of large carryovers from the previous season and also an above average crop. On the other hand, faced with smaller domestic production, shipments from Australia are likely to be reduced substantially in the 1997/98 season. Among the smaller exporters (Table A.3), foreign sales of maize from China have continued at a fast pace and the forecast for coarse grains exports has been raised accordingly. Also, in line with this month’s upward revisions to 1997 production estimates in the CIS, larger exports are currently anticipated from the CIS.

FAO's forecast for global rice trade in 1997 has been increased by about 300 000 tons from the previous report to 18 million tons, which is 1.2 million tons below the volume traded in the previous year and 3 million tons less than the record level in 1995. The decrease in import demand for rice on international markets affected export sales and shipments of almost all major rice exporters. The decrease is attributed not only to good harvests over the last two years in many of the importing countries that have led to stock replenishment in some of them, but also to expectations of another favourable harvest in 1997.

While the forecast for global rice imports in 1997 is only marginally up since the previous report, significant revisions have been made to the imports of some countries. The forecasts for imports by Indonesia and the Philippines have been raised by 350 000 tons and 250 000 tons to 950 000 tons and 900 000 tons respectively, in anticipation of reduced domestic production due to drought related problems. While estimated imports for the Philippines have declined only slightly compared to last year, those of Indonesia have fallen by about 600 000 tons. Import forecasts for Nigeria and Senegal have been raised marginally, due to expected stock replenishment in these countries. By contrast, expected imports into China (Mainland) have been almost halved since the previous report to 350 000 tons due to an upward revision to its 1997 production estimate. China (Mainland) imported a total of about 800 000 tons of rice in 1996. Import forecasts for some other countries have also been reduced, including that for the Islamic Republic of Iran, the world’s largest rice importer, now put at 1.2 million tons, compared to 1.3 million tons last year.

On the export side, shipments from Thailand during the first nine months of the year are estimated at 3.6 million tons, 400 000 tons down from the same period in 1996. The country is expected to export 4.8 million tons in 1997, 500 000 tons less than 1996. The sharpest fall in exports is forecast for India where shipments are expected to decline by more than half or by about 1.8 million tons to 1.7 million tons in 1997, largely due to an increase in domestic demand, attributed to higher wheat prices. Shipments from the United States are expected to decline by over 100 000 tons from 1996 to 2.5 million tons forecast for 1997, and the export forecast for Myanmar was reduced by over 100 000 tons from the previous report to just 25 000 tons, compared to 265 000 tons exported last year. The decline is attributed to flood-reduced production.

By contrast, increased exports from several other countries have contributed to partially offset the reduction in shipments from those mentioned above. Exports from Viet Nam have grown at a faster rate this year than last year and this is partly attributed to its competitive pricing of its lower quality rice. The forecast for Viet Nam’s 1997 exports has been increased by 300 000 tons from the previous report to 3.5 million tons, compared to approximately 3.1 million tons in 1996. Viet Nam’s exports have increased from 1 million tons in 1991 to 3.5 million tons projected for 1997, largely due to higher production and measures taken by the government to promote exports. Pakistan is also expected to export a record 1.7 million tons in 1997, a slight increase from last year, as good harvests over the last three years have led to an increase in export supplies. The estimate of exports from China (Mainland) has been raised by 200 000 tons from the previous report to 650 000 tons due to this month’s upward adjustment in the estimate of its 1997 paddy production. In comparison, China (Mainland) exported 265 000 tons in 1996. Exports from other minor exporting countries, including Uruguay, Australia, Argentina, Egypt and Guyana are anticipated to increase by a combined total of over 600 000 tons in 1997.

For 1998, world rice trade is forecast to increase to about 19 million tons, about 1 million tons up from the estimated 1997 volume. This increase reflects primarily a lower 1997 production and ending stocks in many of the major importing countries, an expected increase in global consumption, and indications of reduced rice area in some countries in the southern hemisphere due to weather related problems. However, the final trade volume will largely depend on harvests in the major exporting and importing countries during the course of 1998.

Imports by Asian countries are expected to increase by 11 percent to 9.9 million tons due to a production shortfall expected in 1997 and, possibly in 1998, largely due to weather related problems attributed to the El Niño phenomenon in some countries. The Philippines and Indonesia are expected to raise their imports by 50 000 tons and 250 000 tons to 950 000 tons and 1 million tons, respectively. The increase is attributed to the need to replenish stocks that are expected to be drawn down in 1997. Imports into China (Mainland) could more than double to 800 000 tons due to an expected increase in fragrant rice purchases from Thailand. Imports by Japan are scheduled to increase in line with its Uruguay Round import commitments. Imports into the Democratic People’s Republic of Korea could double in 1998 to 600 000 tons due to a shortfall in production. The Islamic Republic of Iran is expected to continue as the leading rice importer in the world with a total of 1.2 million tons, similar to the volume anticipated in 1997. This is mainly due to lower production and ending stocks in 1997 and rising food consumption, assuming trend production for 1998.

Imports by South American countries are forecast at about 1.6 million tons, similar to the volume expected in 1997. Brazil, the leading importer in the region, is expected to maintain its high import volume of 1.1 million tons. However, imports by Peru could decline by 50 000 tons to 300 000 tons due to an 8 percent increase in its 1997 paddy production to an estimated 1.3 million tons.

On the export side, Thailand is expected to be the major beneficiary of the anticipated expansion in rice trade and its exports are forecast to rise by over 8 percent from 1997 to 5.2 million tons, mostly due to the expected increase in its fragrant rice production. Higher exports from the United States, Pakistan, Argentina and Uruguay are also expected due to larger production in 1997. Vietnamese exports are provisionally expected to be similar to the record volume anticipated for 1997 due to two consecutive years of good harvests.

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