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Sluggish trend continues in global wheat, rice

Our Bureau

MUMBAI, Aug. 16

SMALLER crops and expanding use are reducing global wheat stocks, but prices remain sluggish because in recent years, the focus has shifted from a global perspective to supplies in major exporting countries.

However, this year's price increases have been restrained despite falling supplies among major exporting countries, the US Department of Agriculture (USDA) pointed out in its latest report on world grain markets and trade.

Non-traditional suppliers in Eastern Europe and the former Soviet Union will export several million tonnes in the next few months due to good harvests, limited storage capabilities and the desire for hard currency. Also, India is expected to continue wor king off burdensome stocks.

In coming months, importers are expected to continue buying hand to mouth unless further deterioration in crop prospects for the major exporters causes a sense of urgency, the report noted.

World wheat trade in 2001-02 is forecast to be 106.2 million tonnes (mt), up 3.4 mt from 2000-01, with higher imports forecast for South Korea, the Philippines and European Union (EU). Global production at 567.6 mt will be down 11.2 mt from the previous year as smaller crops in the US, Canada, EU, China and South Asia more than offset the increase in Eastern Europe, Former Soviet Union, North Africa and Argentina.

World wheat consumption (594.5 mt) is expected to remain well above production for the third consecutive year leading global stocks to fall by an estimated 27 mt from last year to their lowest level (130.9 mt) in 19 years.

Rice: Bearish market conditions continue as low prices and scant importer demand constrain international trade. Global trade for 2001 is projected by USDA at approximately 22.3 mt, down from 22.9 mt of the previous year and the third consecutive year-to- year decline.

s global production remains flat (589 mt in terms of paddy), global consumption continues to grow (406 mt) and is projected to drawdown global stocks by nearly 10 mt from the previous year to 127 mt World rice trade in 2002 is forecast to be little chang ed from the current year.

Coarse grains: World trade in coarse grains during 2001-02 is projected by USDA to be down 2.2 mt from the previous year to 98.5 mt, while global consumption is expected to continue to outpace production and carryout stocks are forecast to fall more than 33.5 mt.

US corn, China corn and EU barley are forecast to comprise nearly two-thirds of world coarse grain stocks. Global corn trade is projected to be down marginally from a year earlier at 71.6 mt. US exports are projected to increase 5.5 mt from 2000-01 leve l of 46 mt because of reduced competition from drought-ridden China.

A large drop in US carryout stock levels will result from a smaller crop, expanded use and larger exports. US continues to dominate global corn trade as other suppliers ebb and flow, USDA report observed. The world barley market is shrinking with falling demand expected from North Africa and Mid-Eastern countries.