FAO/GIEWS - Food Outlook July/August/September 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 4 million tons to about 201 million tons since June (Table A.2). At this level, world imports of cereals would be about 5 million tons, or 2.5 percent, above the previous year’s reduced volume but still smaller than in 1995/96 when world imports rose to 205 million tons. This month’s revision reflects higher expected imports of

both wheat and coarse grains while the forecast for 1998 rice trade remains virtually unchanged since the previous report.

The forecast for global wheat imports in 1997/98 (July/June) has been raised by 1 million tons to 94 million tons, 1.8 million tons above the revised import estimates for 1996/97. All of this year’s increase in imports would be on account of larger shipments to the developing countries, especially in Africa, which would more than offset a decline in aggregate imports by the developed countries.

Total wheat imports into Africa are forecast to rise to a record volume of nearly 21 million tons, up 3.5 million tons from last year and 2 million tons more than forecast in the previous report. In Egypt, a decline in 1997 wheat production and rising domestic consumption could increase imports to 7 million tons, up 300 000 tons from the previous year. At this level, Egypt would be the world’s largest wheat importer in 1997/98, absorbing more than one-third of the total volume shipped to Africa. Prolonged drought in several other countries in North Africa have adversely affected their 1997 wheat crop, necessitating larger foreign purchases. In Algeria, the worst drought-hit country, imports are likely to reach 4 million tons, up nearly 50 percent from last year, though still below the 1994/95 peak. Morocco and Tunisia are also expected to more than double their imports this year, to 2.4 million tons and 1.2 million tons respectively. By contrast, in the rest of Africa, aggregate imports would remain slightly below the previous year’s volume of 5.4 million tons. Most of the decline would be on account of reduced purchases by South Africa, while imports by most other countries are likely to be little changed from the previous year.

In Asia, total wheat imports in 1997/98 are forecast at 48 million tons, close to the previous year but about 1 million tons less than reported in June. This month’s downward revisions to imports by China and India were more than offset by upward revisions for the Islamic Republic of Iran, Pakistan, Indonesia, Iraq and Yemen. As a result of a bumper domestic wheat harvest, wheat purchases by China are currently forecast to drop to 4 million tons, down over 1 million tons from the previous year and 3 million tons below the June forecast. This year’s wheat imports by India are also forecast to fall to 2 million tons, mainly due to larger domestic supplies and increased Government wheat procurements for the central pool.


Wheat Coarse grains Rice (milled) Total

1996/97 1997/98 1996/97 1997/98 1997 1998 1996/97 1997/98

( . . . . . . . . . . . . . million tons . . . . . . . . . . )
Asia 47.6 48.0 54.8 57.0 8.4
Africa 17.3 20.7 8.2 8.7 3.9
Central America 4.7 4.5 8.3 8.8 1.3
South America 10.4 10.8 5.1 6.0 1.6
North America 2.5 2.7 3.3 3.5 0.6
Europe 6.6 4.6 6.3 4.5 1.0
CIS 2.6 2.1 0.3 0.2 0.4
Oceania 0.5 0.5 0.2 0.2 0.3
WORLD 92.2 94.0 86.5 89.0 17.5 18.1 1/ 196.2 201.1
Developing countries 72.5 76.7 54.0 57.8 14.4 15.1 140.9 149.6
Developed countries 19.7 17.3 32.4 31.2 3.1 3.0 55.2 51.5

1/ Highly tentative.

By contrast, the forecast for imports by the Islamic Republic of Iran in 1997/98 has been raised by 1.3 million tons to 5.8 million tons. At this level, imports would, nevertheless, be around 1 million tons below the record volume of 6.8 million tons in 1996/97. Low subsidized wheat prices in recent years, which have encouraged larger feed use in the Islamic Republic of Iran, particularly in the expanding poultry sector, and two years of drought and sizeable exports to some of the neighbouring countries necessitated larger foreign purchases by the Government. In Pakistan, the Government plans to import 4 million tons of wheat in 1997/98, 1 million tons more than in the previous year in order to meet a domestic wheat shortage and to build up stocks.

The forecast for 1997/98 total wheat imports into Europe has been lowered by 800 000 tons to 4.6 million tons, down 2 million tons from the previous year. Most of the decline in imports is expected to occur in eastern Europe. In Poland, in particular, imports could fall by 1 million tons and return to more normal levels of about 800 000 tons as larger opening stocks are expected to compensate for a small decrease in this year’s domestic production. In Bulgaria, following a sharp recovery in domestic production, the country is expected to meet its needs this year without resorting to imports. Although floods resulted in smaller harvests than expected in Romania and the Czech Republic, this year’s output in these countries is still substantially above last year, reducing import requirements. Also in the CIS, the upturn in the 1997 wheat harvest is expected to result in smaller imports than in the previous year.

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, 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, purchases are likely to remain at around the same levels as in 1996/97.

As regards export prospects (Table A.3), this year’s shipments are forecast to decline by 600 000 tons from the previous season to 94 million tons (July/June basis). Total exports from the five major wheat exporters are expected to remain below last year’s. In the EC, despite an above-average harvest, shipments are likely to remain at the same level as in 1996/97 and early indications suggest that the European Commission will continue with its cautious approach to exports. Since the start of the new season, the EC has continued to limit exports by imposing a tax in order to keep domestic prices under control, in view of the recent rise in world prices and the strengthening of the U.S. dollar. Wheat exports from Argentina and Australia are anticipated to fall sharply in 1997/98 after rising to record volumes in 1996/97, mainly reflecting the expectation of reduced crops later in the year. By contrast, exports from Canada and the United States are forecast to increase in 1997/98 although, so far, their export commitments are only keeping pace with last year’s shipments. A more positive export outlook is expected for a few other countries, particularly in eastern Europe where Romania and Hungary are seen to have large export availabilities and could boost their sales this season. In early August, the Government of Romania cancelled the 30 percent additional wheat tax in order to facilitate exports and in Hungary, the Government has continued to grant export licences for the new 1997 crop without putting any limit on volume.

Global coarse grain imports in 1997/98 (July/June) are forecast at 89 million tons, 2.5 million tons, or 3 percent, above the previous year’s estimated uptake and up 3 million tons from the forecast in June. This month’s main revisions include upward adjustments to import forecasts for Algeria, Brazil, China and Egypt which would more than offset downward revisions to imports by several countries in eastern Europe. Overall, the developing countries account for all of this year’s anticipated expansion in world coarse grain imports. Purchases by developing countries are forecast to approach 58 million tons, only 1 million tons below the 1995/96 record level. By contrast, coarse grains imports by the developed countries are forecast to fall for the sixth consecutive year to 31 million tons, representing about one-third of the world total. The bulk of the anticipated rise in global coarse grain imports in 1997/98 would be in the form of maize, with imports of this grain forecast to reach around 64 million tons, up 2 million tons, or 4 percent, from last year. Imports of barley are also anticipated to rise by nearly 1 million tons, or 6 percent, to 15.5 million tons. At about 6 million tons, world imports of sorghum would be slightly smaller than last year, but for other coarse grains, including millet, oats and rye, imports are likely to remain at around the same levels as in 1996/97.

Aggregate coarse grain imports into Africa in 1997/98 are currently put at 8.7 million tons, or 500 000 tons more than the estimated imports in 1996/97. The increase is almost entirely due to higher import demand by several countries in North Africa because of reduced domestic barley and maize crops. By contrast, imports elsewhere in Africa are likely to drop for the second consecutive year to 2.6 million tons, down 400 000 tons from last year. This decline would be mainly in Kenya and Zimbabwe due to improved crops, and would more than offset larger imports expected for Lesotho and Zambia.

In Asia, coarse grains imports are expected to reach 57 million tons, 2 million tons, or 4 percent, above last year’s reduced volume and 1.2 million tons more than was reported in June. The increase in this month’s forecast mainly reflects upward adjustments to imports by China, Israel and Indonesia. In China (excluding the Province of Taiwan) the drought in the northern maize producing provinces is expected to curb production and to result in some maize imports. By contrast, maize imports by the Province of Taiwan are likely to stabilize at around 5.4 million tons, close to last year’s reduced level when import demand was restrained following the outbreak of foot-and-mouth disease which led to a ban on pork exports in March 1997 and resulting lower feed demand. In Indonesia, despite slightly higher production, the continuation of strong feed demand is expected to result in a rise of about 1 million tons in maize imports, 300 000 tons more than anticipated earlier and 200 000 tons more than last year. The forecast for coarse grains imports by the Republic of Korea has been lowered by 200 000 tons to 9.8 million tons, which would still represent a 700 000 tons increase over the previous season. The forecast for imports by Saudi Arabia has also been reduced by 200 000 tons to 6.4 million tons, consisting mainly of barley. At this level, imports will be 400 000 tons below last year, largely due to a higher domestic barley output.

In Europe, aggregate coarse grain imports in 1997/98 are currently forecast at 4.5 million tons, down 1 million tons from the previous report and nearly 2 million tons, or around 28 percent, below last year. In the EC, an anticipated above-average coarse grain crop and large domestic availabilities of lower quality wheat, which could substitute for coarse grains as animal feed, are expected to reduce maize imports by about 800 000 tons. Imports by Bulgaria and Poland are also forecast to fall sharply due to larger domestic crops. Total imports by the CIS are forecast at 200 000 tons, slightly down from last year, and an insignificant volume compared to previous years when the region ranked among the world’s leading importers of coarse grains.

Imports into Latin America and the Caribbean are forecast to approach 15 million tons in 1997/98, up 1.5 million tons from the previous year and 1 million tons more than anticipated in June. Mexico, the region’s largest importer, is forecast to import the same amount as last year of about 6.3 million tons, while purchases by Brazil are forecast to more than double despite bigger domestic output. Strong domestic and export demand for poultry meat have boosted the demand for maize from Brazil’s expanding poultry industry.

Turning to exports, coarse grain shipments in 1997/98 (July/June) are expected to decline by 2 million tons compared to 1996/97. Among the key exporters in the northern hemisphere, the United States could draw on abundant carryovers and make larger exports possible despite the prospects for a lower crop this year. Shipments from Canada and the EC could also increase slightly given this year’s anticipated above-average harvests and larger domestic availabilties of low quality wheat. By contrast, exports from China are likely to be curbed as a result of lower domestic production. Much smaller shipments are anticipated from several southern hemisphere countries, particularly from Argentina where early projections for 1998 maize crops point to reduced plantings. In Australia, the anticipated drop in barley production is expected to limit barley exports while a reduction in this year’s maize crop in South Africa has reduced the country’s export availabilities this season.

FAO’s forecast for the 1997 global rice trade has been lowered by 0.4 million tons from the previous forecast to 17.7 million tons, 1.8 million tons down from last year’s level and 3.3 million tons less than the record set in 1995. The reduction is largely due to good harvests over the last two years in many of the importing countries that have led to an increase in stocks, and expectations of another favourable harvest in 1997.

Rice purchases by the Islamic Republic of Iran, the world’s leading importer, remain unchanged from the previous forecast at 1.2 million tons in 1997, compared to 1.3 million tons in 1996. Imports by Brazil, the world’s second largest rice importer, are expected to increase by 22 percent from last year’s estimated purchases to 1.1 million tons in 1997, due to a 5 percent shortfall in production. Imports by Indonesia are forecast at 0.6 million tons, less than half the level in 1996, as its production is expected to increase by about 1 million tons and stocks are reported to be adequate. In the Philippines, where production is also expected to increase slightly in 1997, imports are anticipated to decline from 0.9 million tons in 1996 to about 0.7 million tons. Rice imports by Peru are forecast to be similar to last year’s level of 0.35 million tons due to larger stocks and a good harvest estimated for 1997. Increased rice imports during the 1990s have led to a build up of stocks in Saudi Arabia, which are estimated at about 0.5 millions currently, up from 60 000 tons in 1989. Consequently, Saudi Arabia’s rice imports in 1997 are forecast to fall by 10 percent to 0.9 million tons. Purchases by Japan in 1997 are expected to be about 0.5 million tons, just enough to meet its Uruguay Round import commitment.

Imports into South Africa, the leading rice importer in Africa, have doubled over the past decade from 250 000 tons in 1988 to a forecast of 500 000 tons in 1997. South Africa imports almost all of its rice consumption needs since it only produces an insignificant amount of about 3 000 tons annually. Imports by the other major importing countries in Africa are anticipated to be lower in 1997 due to improved stock levels and expectations of good harvests. Senegal, the second largest rice importer in Africa, is forecast to import a total of 450 000 tons in 1997, about 6 percent below last year’s uptake, due to large domestic supplies. Imports by Côte d’Ivoire are forecast at 370 000 tons, slightly down from last year while Nigeria is expected to purchase 350 000 tons, similar to the volume in 1996, due to anticipated increases in production in both countries.

With regard to exports, Thailand, the world’s leading rice exporter, is now forecast to export 4.8 million tons, 0.2 million tons less than anticipated earlier, as the pace of the country’s shipments in the first half of 1997 lagged behind last year’s due to a lower import demand. By the end of June, Thailand’s exports were about 2.3 million tons, 0.5 million tons below the level achieved in the same period last year. In order to reach the expected 4.8 million tons exports, Thailand will need to ship an average of slightly over 0.4 million tons every month during the second half of the year.

The forecast for Vietnamese exports in 1997 has been increased by 0.2 million tons from the earlier expectations to a record 3.2 million tons, slightly above last year’s volume but below the government target of 3.5 million tons. This would consolidate Vietnam’s role as the second largest global rice exporter assumed last year, resulting from increased production over the last few years combined with stagnant domestic per caput consumption. By the end of July, exports from Vietnam totaled about 2.29 millions, compared to 1.64 million tons shipped over the same period in 1996. However, exports from Vietnam have been rather sluggish in recent weeks largely because of an increase in Vietnamese rice prices partly due to reports of flood damage to the crop. Although the estimate of United States rice exports in 1997 has been raised from the previous forecast by 0.1 million tons to 2.5 million tons, it is still the lowest level of exports in five years which is attributed to a 6 percent rise in domestic consumption.

Despite a reduction from the previous forecast, exports from Pakistan are still expected to set a new record of 1.7 million tons in 1997, marginally above the previous record of 1.67 million tons reached in 1996. Shipments in March and April totaled an impressive 558 200 tons, compared to 304 900 tons during the same period in 1996. Exports from China (Mainland) are forecast at 450 000 tons, up from 265 100 tons in 1996 but below the ten-year average of about 0.7 million tons. Total exports during the first five months of the year were 271 000 tons, compared to 76 600 tons exported during the same period in 1996. India’s exports in 1997 are anticipated to be 1.7 million tons, the lowest in three years and down from 3.6 million tons shipped last year. The lower export level is attributed to tighter supplies as increased domestic consumption has led to a decline in stocks, which are anticipated to fall to their lowest level in the 1990s.

The final volume of global rice trade in 1997 will largely depend on the prospects for the new crop in the major producing countries in Asia and on rice yields in the United States. For 1998, world rice trade is tentatively forecast at around 18 million tons, 0.4 million tons up from the expected volume of trade in 1997. As is the case for 1997, trade in 1998 is expected to be dominated by large supplies of low quality rice exerting downward pressure on prices, which could boost demand from the lower income countries. In addition, the Islamic Republic of Iran and Brazil are expected to increase their purchases in 1998, given their lower production and stocks in 1997.

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