FAO/GIEWS - Food Outlook March/April 1997

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The forecast for global trade in cereals in 1996/97 has been raised by 3 million tons to nearly 189 million tons since February (Table A.2). At this level, world imports of cereals would be some 18 million tons, or 9 percent, below the previous year and represent the lowest trade volume since 1990/91. This month’s revisions take into account higher import estimates for wheat and rice which more than offset the reduced forecast for trade in coarse grains.

Global wheat imports in 1996/97 (July/June) are currently forecast at 87.4 million tons, nearly 8 million tons below the previous year, but 3.4 million tons higher than anticipated in February. However, despite this month’s upward adjustment, international wheat trade would be the smallest in volume since 1986/87. Most of the decline would be in the developing countries where imports are expected to fall to 69.5 million tons, some 7 million tons or 9 percent below last year but 2 million tons up from the previous forecast. By contrast, aggregate imports by the developed countries are currently forecast at around 18 million, 1.4 million tons more than was assumed earlier and thus only 500 000 tons smaller than in 1995/96.

The bulk of this year’s contraction in international wheat trade would reflect smaller imports into Africa and Asia. Wheat imports into Africa are forecast to fall by almost 3 million tons to 16.4 million tons, unchanged from the previous report. This decline would be mainly due to reduced purchases by countries in North Africa, notably Morocco and Tunisia, because of improvements in domestic supplies. Imports into the sub-Saharan Africa are also forecast to decline by 600 000 tons, reflecting an improved domestic production in several countries.

In Asia, total wheat imports are currently forecast at 45 million tons, 4 million tons less than in 1995/96 but 2.5 million tons more than was reported in February. Wheat purchases by China, excluding the Province of Taiwan, are anticipated to fall to 5 million tons as compared to over 13 million tons in 1995/96 due to a bumper crop. While the forecast for imports by Turkey has been raised by 400 000 tons to 1.2 million tons, this year’s imports would be 1.3 million tons less than the exceptionally large purchases in the previous year. The forecast for imports by the Islamic Republic of Iran has been raised to 4.7 million tons, 1.2 million tons more than was forecast earlier and 1.4 million tons above last year. This increase is mainly on account of below-average harvests in 1996 and the possibility of even lower production in 1997. In response to large purchases in recent months, the forecast for wheat imports into India has been raised by 500 000 tons to 2 million tons. While India was a net exporter last year, the Government decided to allow imports in 1996/97 in order to curb the continuing rise in domestic prices and prevent stocks from falling.


Wheat Coarse grains Rice (milled) Total

1995/96 1996/97 1995/96 1996/97 1996 1997 1995/96 1996/97

( . . . . . . . . . . . . million tons . . . . . . . . . . . . . )
Asia 49.0 45.1 57.4 54.7 10.1 8.8 116.4 108.6
Africa 19.2 16.4 9.1 6.8 3.9 4.0 32.3 27.2
Central America 4.6 4.6 9.7 7.2 1.4 1.4 15.7 13.2
South America 10.8 10.4 5.2 4.8 1.5 2.0 17.4 17.3
North America 1.8 2.1 3.7 3.3 0.5 0.5 6.0 5.8
Europe 5.4 6.0 6.5 5.5 1.1 1.0 13.0 12.6
CIS 3.8 2.3 0.6 0.4 0.4 0.4 4.8 3.1
Oceania 0.4 0.5 0.2 0.1 0.3 0.3 1.0 1.0
WORLD 95.1 87.4 92.4 82.9 19.1 18.4 1/ 206.7 188.7
Developing countries 76.7 69.5 59.3 51.2 16.1 15.2 152.1 135.9
Developed countries 18.5 17.9 33.2 31.7 3.0 3.2 54.6 52.8

1/ Highly tentative.

Aggregate wheat imports by countries in Europe is forecast to rise by 600 000 tons from last year to 6 million tons in 1996/97, up 1.2 million tons from the previous forecast. While purchases by the EC are expected to decline by about 1 million tons compared to the previous season, imports have been expected to rise substantially among the non-EC countries particularly in Bulgaria and Romania mainly due to reduced 1996 harvests. In addition, higher imports are also forecast for Poland and the Czech Republic.

Imports into Latin America and the Caribbean are forecast at 15 million tons, unchanged from the previous forecast and only slightly below last year. The decrease would be mainly on account of Brazil and Colombia, while for most other countries, this year’s imports are likely to remain at around the same levels as in 1995/96.

Bumper crops in 1996 are forecast to result in larger wheat exports in the 1996/97 season from almost all major exporters, with the exception of the United States. This year’s tight domestic supply situation in the United States would result in a sharp cut in exports from that country, to 24.5 million tons (July/June), representing a drop of about 11 million tons, or 27 percent. This decline would be larger than the anticipated contraction in international wheat trade.

Global coarse grain imports in 1996/97 (July/June) are forecast at nearly 83 million tons, 9.5 million tons, or 10 percent, below the previous year’s estimated imports and 400 000 tons lower than was reported in February. The bulk of the anticipated decline in coarse grain trade in 1996/97 would reflect a sharp contraction in maize trade which would more than offset the likely small increase in barley imports. Imports by the developing countries are anticipated to fall sharply from last year’s record volume of 59 million tons to 51 million tons, a slightly smaller volume than was anticipated earlier and the lowest since 1981/82. Coarse grain purchases by the developed countries are expected to reach 32 million tons, unchanged from the previous forecast and 1.5 million tons below the estimated imports in 1995/96.

Aggregate coarse grain imports into Africa in 1996/97 is forecast at 7 million tons, 3 million tons, or 25 percent, below the estimated imports in 1995/96 and the lowest since 1990/91. Most of the anticipated decline would be on account of reduced imports by several countries in North Africa, reflecting their larger domestic crops. Imports into sub-Saharan Africa are also likely to drop sharply due to improved domestic production, especially in southern Africa. On the other hand, some countries are anticipated to increase their imports in 1996/97, notably Kenya, where, as a result of a poor 1996 crop, imports are forecast to reach 800 000 tons, compared to an estimated 400 000 tons of exports in the previous year.

In Asia, total imports are likely to fall by 2.7 million tons, or about 5 percent, to around 55 million tons. The largest decline is expected in China, excluding the Province of Taiwan, where this year’s purchases are forecast to fall from 5.4 million tons in 1995/96 to 1.8 million tons. Following a bumper crop in 1996, China’s coarse grain imports (mainly maize) fell sharply during the first half of the season and the country has been exporting maize since January 1997. As a result of the recent outbreak of foot-and-mouth disease in the Province of Taiwan which led to a ban on pork exports (effective March 21), the forecast for maize purchases by the Province in the remaining three months of the season has now been reduced by 300 000 tons. This, in addition to the slowing of maize purchases already in the first half of the season, would bring total coarse grain imports by the Province to 5.5 million tons in 1996/97, down 800 00 tons from last year. For most other countries in Asia, imports are expected to remain the same or to increase, mainly reflecting the strong demand by the region’s animal feed sector. The increase in this year’s imports is expected to be most notable in Saudi Arabia where this year’s larger barley purchases could result in total imports of 5.9 million tons, up 1.3 million tons from last year.

In Europe, aggregate coarse grain imports in 1996/97 are forecast at 5.5 million tons, 1 million tons less than in 1995/96. In the EC, as a result of large domestic supplies following a bumper 1996 harvest, imports are currently put at 2.2 million tons, over 2 million tons below last year and 300 000 tons less than anticipated earlier. By contrast, imports into several countries outside the EC are expected to rise, mostly due to production shortfalls, especially in Bulgaria, the Czech Republic and Romania.

Similarly, imports into Latin America and the Caribbean are forecast to decrease in 1996/97. Mainly as a result of reduced import demand by Mexico, imports into Central America would show a decline of about 2.5 million tons from last season’s near record volume of some 9.7 million tons and approach more normal levels of around 7 million tons. Also, in South America, total imports are forecast to decline by about 400 000 tons from last year to reach 4.8 million tons. With the exception of Brazil, which could increase its purchases slightly this year, imports by most other countries in South America are expected to decline or remain close to those in 1995/96.

Regarding exports, this season’s large availabilities of coarse grains in all major exporting countries are in contrast to the sharp contraction in international trade. The decline in world coarse grain trade is likely to be absorbed entirely by the United States, the world’s largest coarse grain exporter. Shipments from Canada and the EC are expected to expand most while smaller increases are also anticipated from Australia and Argentina. In addition, larger exports are also forecast for Hungary and South Africa, while China has returned to the export market after a year’s absence.

FAO's forecast for world rice trade in 1997 remains unchanged from the previous month at 18.4 million tons, which would be 0.7 million tons lower than the volume traded in the previous year and 2.5 million tons below the record level achieved in 1995.

Although the global trade forecast remains little changed, substantial revisions have been made to the forecasts for individual countries. The import forecasts for the Philippines and Brazil have been substantially raised. Despite a good 1996 output and stocks in the Philippines reaching 1.75 million tons in early March, 17 percent more than in the same period last year, the Government has announced that it would import 650 000 tons of rice in 1997, as the quantities held in stock were estimated to be insufficient to meet 90 days of consumption requirements. The bulk of the tonnage required has already been contracted in the past month with Thailand, Viet Nam and China as the principal suppliers. At this level, imports into the Philippines in 1997 would be only 248 000 tons less than the record purchases it had made in the previous year. Official reports indicate that Brazil's imports, which totaled 0.9 million tons in 1996, are expected to increase to 1.5 million tons in 1997. This is mainly because of two successive years of reduced production which have resulted in a draw-down of stocks.

In contrast to the increased import forecast for Brazil and the Philippines, Bangladesh's 1997 imports are likely to fall sharply. Preliminary indications are that deliveries scheduled for the first half of 1997 would total less than 100 000 tons compared to the 496 311 tons that were imported in the first half of 1996. Taking this into account, FAO's forecast for Bangladesh's 1997 imports has been lowered substantially. The forecast for China's (Mainland) rice imports in 1997 has also been reduced to 0.6 million tons, which would be 160 000 tons less than the volume imported in 1996. The revision takes into account the larger than earlier expected 1996 output of rice. Recent reports on the domestic rice market situation in the country show a marked fall in the retail prices of rice, and in some provinces the rice market appeared to be "saturated". However, because of increased affluence, especially in the southern provinces and the preference in these areas for higher quality imported Thai varieties, rice would continue to be imported in 1997. The import forecasts for Iraq and the Korea DPR have also been lowered. While both countries are expected to take larger deliveries of rice this year than in 1996, delays in the implementation of rice purchases or food aid are expected to curtail the final quantities of rice imported into the country.

Very few changes have been made to the 1997 import forecast of other countries. Japan's 1997 calendar year imports are still expected to rise above the level in 1996. This is partly because its end-of-the year purchases of rice, made in compliance with its 1996 fiscal year minimum market access commitments, are likely to arrive in calendar year 1997. Moreover, Japan's rice market access commitment for fiscal year 1997 totals 531 000 tons (milled equivalent) compared to 455 000 tons for 1996 fiscal year.

Many of the major exporters are likely to feel the impact of the weaker global demand for rice. Exports from the United States in 1997 are forecast to fall by 0.3 million tons to 2.3 million tons. India's shipments could take an even greater drop, contracting by an estimated 26 percent to 2.5 million tons in 1997. Viet Nam's 1997 exports are also likely to fall. Export shipments to-date have already declined significantly from the same period in 1996. While recent government reports indicate that Thailand's exports may increase marginally to 5.35 million tons in 1997, the outlook remains very uncertain. In the first two months of the year weak international demand and the relative firmness of Thai export prices vis-à-vis other exporters have affected its rice exports drastically. Shipments in January and February totaled 665 848 tons, 34 percent down from the corresponding period in the previous year. Despite a weakening of some of its export prices in March, sales have remained relatively small compared to the previous year. Reflecting this, FAO's forecast for Thailand's exports in 1997 has been lowered to 5.2 million tons, just marginally less than in 1996 but substantially below its 1995 level. By contrast, exports from Pakistan, which reached a record 1.66 million tons in 1996, are likely to be maintained. China's exports could rebound because of greater availabilities, especially of rice with a large proportion of brokens. Following a huge build-up of stocks, food aid in rice from Japan could remain substantial in 1997. In 1995 and 1996, some 419 000 tons and 140 000 tons respectively were shipped as food aid.

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