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Global wheat output may remain below offtake

Our Bureau

MUMBAI, Oct. 22

FOR the third consecutive year (2001-02), global wheat production is expected to remain below consumption and global stocks will fall to their lowest levels in 13 years.

Global wheat production in 2001-02 is forecast at 571.2 million tons, down from 579.2 ml.t. of last year, according to the latest figures of the US Department of Agriculture (USDA). The decline is accounted for by lower crop in major origins such as Cana da, China, United States, European Union and India, partially offset by increases in Russia, Ukraine and Eastern Europe.

The global wheat consumption forecast for the current year is placed at 594 ml.t., up from 588.5 ml.t. of last year with higher consumption expected in origins that have harvested a bigger crop.

World wheat trade in 2001-02 is forecast to be 106.7 ml.t., up 3.8 ml.t. from the previous year. While South Korea and the EU are likely to import more, additional supplies are expected to originate from India and Eastern Europe. USDA has placed India's wheat exports at 3 ml.t.

According to the agency, smaller aggregate wheat production among the major exporters (US, Canada, Australia, Argentina and EU) is forecast to cause their ending stocks to fall to the lowest level in five years. Historically, there has been a strong inve rse relationship between stocks held by these exporters and global prices.

However, this relationship has been muted by the unusually abundant supplies of cheap wheat available from countries that have not been traditional large exporters. These countries are led by Russia, Ukraine, Kazakhstan and Hungary which have bigger crop s, and India which has large carryin stocks, the agency pointed out.

Exports by the EU are forecast to fall to 12 ml.t. which would be the lowest in 25 years. Internal EU market prices are well above world market prices because of crop shortfalls and producers holding supplies off the market. Consequently, the Commission has been unwilling to grant export subsidies for fear of further boosting domestic prices. However, without subsidies and with a stronger Euro, EU wheat cannot compete with the cheap supplies from Eastern Europe and former Soviet Union.

Rice: Global rice production will continue to trail global consumption in 2001-02, leading to a further fall in global ending stocks. Given the negligible import growth prospects, world trade in rice will remain flat at about 22 ml.t. in the calendar yea r 2002.

World rice output in 2001-02 is forecast to be 1.6 ml.t. lower at 394 ml.t., while consumption is placed at close to 405 ml.t., up 4 ml.t. from last year, according to the USDA. Rice exports from India are forecast to remain flat at one million tons in 2 002. Major importers Indonesia, Philippines and Iran will continue to import limited quantities.

Coarse Grains: World coarse grains trade for 2001-02 is projected down 2.6 ml.t. from the previous year to nearly 100.5 ml.t. Global consumption is expected to continue to outpace production and carryout stocks are forecast to fall 29 ml.t. Corn (maize) in USA and China and barley in EU are forecast to comprise nearly two-thirds of world coarse grains stocks. Global corn trade is projected to be down marginally from a year earlier at 74 ml.t.