FAO/GIEWS - Food Outlook No.2 - April 2000 p. 6

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World cereal trade in 1999/2000 to expand by almost 4 percent

Global trade in cereals in 1999/2000 is forecast to reach 222 million tonnes, unchanged from the previous report. This volume is some 8 million tonnes, or nearly 4 percent, more than in 1998/99 (Table A.2). A large increase in wheat imports would be responsible for most of this expansion but, based on the latest revisions, the growth in coarse grain imports is also expected to be

significant. Among the other major cereals, smaller trade is anticipated for rice, for which this month's forecast represents a further downward adjustment. Despite a likely reduction in rice imports, aggregate cereal imports by the developing countries as a group, are forecast to approach a record volume of around 160 million tonnes. However, with prices generally below those of the previous year, the cereal import bill of the developing countries in 1999/2000 is likely to decline by nearly 3 percent compared to the previous year to US$20.7 billion. In the Low Income Food Deficit Countries (LIFDCs), total cereal imports are forecast to reach 70 million tonnes, unchanged from 1998/99, which in value terms would be roughly equivalent to some US$9 billion, about US$500 million less than in the previous year.

World trade in wheat and wheat flour (in wheat equivalent) in 1999/2000 (July/June) is put at 102.5 million tonnes, unchanged from the previous report, and up over 5 million tonnes, or 6 percent, from the reduced imports in 1998/99. Total wheat imports by the developing countries are expected to rise by 2 million tonnes to 78 million tonnes, which is slightly less than was forecast in the previous report. Aggregate imports by the developed countries are put at nearly 25 million tonnes, up 3.5 million tonnes from the previous year and also slightly higher than the previous forecast.

The forecast for wheat imports into Africa has been lowered this month by about 200 000 tonnes to 23 million tonnes, slightly less than in 1998/99, as reduced imports by Egypt and a few countries in the sub-Saharan region are expected to more than offset larger purchases by Algeria and Morocco. In Asia, wheat imports in 1999/2000 are forecast to reach nearly 48 million tonnes, some 2.4 million tonnes more than the season before. The forecast for imports by the Islamic Republic of Iran has been raised this month by 500 000 tonnes to 6.5 million tonnes. The severe drought is to blame for higher imports by that country this season. By contrast, the forecast for imports by Pakistan has been lowered to 2.5 million tonnes, down 700 000 tonnes from the previous report. This revision takes into account an anticipated rise in wheat production to be harvested this year.

The forecast for wheat imports into Europe has been raised by almost 1 million tonnes to 11.8 million tonnes, up 4 million tonnes from the previous year. The bulk of the increase from the previous year and of this month's upward revision reflects larger than expected imports by the Russian Federation, which comprise food aid carried over from the previous season. In addition, the Russian Federation has asked for more food aid this season, and so far the United States has agreed to donate 300 000 tonnes of wheat. Total imports into Latin America and the Caribbean are expected to decline slightly this year to around 17.4 million tonnes. Wheat purchases by Brazil are expected to decline from the previous season mainly because of higher domestic production.

Regarding exports (Table A.3), given this year's rise in world demand, shipments from most major exporting countries are expected to rise. The largest increases are expected in Canada (up 4.3 million tonnes) and Australia (up 1.6 million tonnes). Export sales from Argentina and the EC are also likely to increase. Among the smaller exporters, the Czech Republic and Kazakhstan are expected to boost their export sales this season because of higher domestic production. By contrast, shipments from Hungary, Bulgaria, Poland, Romania, Syria, Turkey and Ukraine are anticipated to decline in view of reduced supplies.

The forecast for world trade in coarse grains in 1999/2000 has been raised by 700 000 tonnes this month to 96.7 million tonnes. At this level, world imports would be over 4 million tonnes, or 5 percent, above those of the previous year. Among the individual coarse grains, maize and barley could expand most, to 70 million tonnes and 17 million tonnes, respectively. An increase in coarse grain imports by the developing countries to almost 63 million tonnes would account for most of the anticipated increase in world trade in 1999/2000. In the developed countries, aggregate imports could reach 34 million tonnes, also up from the previous year.

Overview of World Cereal Imports - Forecast for 1999/2000

    Wheat Coarse grains   Rice (milled) Total 
1998/99 1999/2000 1998/99 1999/2000 1999 2000 1998/99 1999/2000
  ( . . . . . . . . . . . . . . . . . . . . . . . . . . million tonnes . . . . . . . . . . . . . . . . . . . . . . . )
Asia 45.5 47.9 52.7 54.5 14.1 12.2 112.3 114.5
Africa 22.8 22.5 11.1 12.4 5.4 5.5 39.2 40.4
Central America 5.6 5.9 11.2 11.2 1.5 1.5 18.3 18.5
South America 12.1 11.5 7.4 7.2 1.3 1.1 20.8 19.8
North America 2.9 2.5 3.7 3.5 0.6 0.6 7.3 6.7
Europe 7.7 11.8 6.1 7.9 1.8 1.7 15.5 21.4
Oceania 0.5 0.5 0.1 0.1 0.4 0.4 1.0 0.9
WORLD 97.1 102.5 92.3 96.7 25.1 23.0 214.4 222.3
Developing Countries 75.9 78.0 59.9 62.7 21.2 19.2 157.0 159.9
Developed Countries 21.1 24.6 32.4 34.0 3.8 3.8 57.4 62.4

Total coarse grain imports into Africa are put at over 12 million tonnes, more than 1 million tonnes higher than in 1998/99. This increase would be almost entirely due to larger barley imports by Morocco and maize imports by several countries in sub-Saharan Africa, namely Kenya, Zimbabwe, Rwanda, South Africa, Tanzania and Zambia. In nearly all cases, the increase in imports would be in response to below-average domestic production. In Asia, the forecast for imports in 1999/2000 has been raised to 54.5 million tonnes, up 1.8 million tonnes from the previous year and 800 000 tonnes more than was reported previously. Most of this month's upward adjustment reflects larger than expected maize purchases by Indonesia. Compared to the previous year, barley and maize imports by the Islamic Republic of Iran are forecast to increase by 600 000 tonnes due to strong demand and low domestic production. Large export availability of more competitively priced maize from China is also expected to result in larger purchases by the Republic of Korea this season, mostly at the expense of lower imports of feed quality wheat.

In Europe, total coarse grain imports in 1999/2000 are currently put at 7.9 million tonnes, up 300 000 tonnes from the previous report, mostly because of larger imports by the Russian Federation than were forecast earlier. Maize imports by Poland are also anticipated to increase due to lower domestic production. A sharp reduction in output in Romania is expected to boost barley imports by that country. For Latin America and the Caribbean, this season's imports are expected to be only slight below the previous year, at around 18.4 million tonnes. Mexico is forecast to reduce its maize purchases, following two consecutive years of above-average crops. By contrast, imports by Brazil are forecast to increase by some 600 000 tonnes, mainly in response to strong demand from the fast growing poultry sector.

In the export market, one of the main features in the 1999/2000 marketing season has been the continuation of large and competitively priced exports from China. Maize shipments from China are forecast to reach 5.5 million tonnes, up 2 million tonnes from the previous year. At this level, China would rank as the world's third largest maize exporter after the United States and Argentina. Another important development this season is higher exports of barley from the EC, which, based on the current pace, are expected to exceed last year's level by over 1 million tonnes. Larger exports of barley from the EC would, to some extent, offset the expected decline in shipments from Australia and Turkey, following reduced production in both countries. Coarse grain exports from most other major exporting countries are expected to remain mostly in line with the previous year's levels.

FAO's forecast for world rice trade in calendar year 2000 has been reduced by 700 000 tonnes from the previous report to about 23 million tonnes, 2 million tonnes less than in 1999. Most of the annual decline stems from expected reductions in purchases by countries in Asia, where the major importers experienced a recovery in production in 1999 and/or are expecting good harvests in 2000. In addition, some Governments have put in place measures to protect domestic producers from the low prices prevailing on the international market.

The forecast for imports by Indonesia has been cut by 500 000 tonnes from the last report to 2.5 million tonnes, since the country has indicated that, as of late March, it has enough rice to meet domestic requirements. A 30 percent import duty was introduced at the beginning of the year applicable to all rice imports. This duty has been bound at least until August 2000, under agreement with the International Monetary Fund. Bangladesh, which has emerged as the second largest rice importer in the world over the last couple of years, has re-introduced a duty of 5 percent on rice imports, following a recovery in last season's production and stocks, and expectations of abundant 2000/01 harvests. Pending additional information, the forecast for the country's imports has been left unchanged at 1 million tonnes. The forecast for imports by the Philippines has been lowered by 100 000 tonnes from that previously anticipated to 800 000 tonnes. The country had a good crop during 1999/2000 and expects to better that performance in the 2000/01 paddy season. Similarly, prospects of a rise in production and large inventories in Brazil, another important market in 1999, have led to a 400 000 tonnes reduction in the country's forecast imports from the level noted in the last report, to approximately 700 000 tonnes. The production shortfall in the Islamic Republic of Iran during the previous paddy season is expected to boost its import requirements by 10 percent over the volume imported in 1999. Its import forecast for 2000 still stands at 1.1 million tonnes.

By contrast, the forecasts of shipments to a number of smaller importers including Singapore, Madagascar, Mozambique, Ecuador and Honduras have been raised by a total of 300 000 tonnes. There have also been reports of cross-border rice shipments from Pakistan to India, where lower grade rice is more expensive than that of comparable quality in neighbouring Pakistan. Imports into India of low grade rice, of at least 50 percent brokens, are currently duty free.

On the export side, a number of the major exporters will ship less during 2000 in the face of a contraction in import demand, with high cost producers affected the most. The forecast for shipments from India has been cut by 300 000 tonnes from the previously reported volume to 1.7 million tonnes. The presence of the country as a rice supplier to the world market has been sporadic during the last five years. China has played a major role as an exporter on the international market since 1996. The country is still expected to be a significant supplier in 2000, but it is likely to ship a smaller volume than in the last two years. The forecast for China's exports has been reduced by 200 000 tonnes to 2.5 million tonnes. Shipments from some smaller exporters, including Argentina and Australia, have also been reduced by about 200 000 tonnes given the expected contraction in production in those countries. The forecasts for exports from Thailand, Viet Nam and United States, the three leading world suppliers, have been left unchanged from the volumes reported previously.

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