Wheat Exports Should Increase; Stocks Large

May 16, 2000

U.S. wheat production could decline this year by about 2 million tons to the lowest level in five years, but stocks are large enough to keep supplies plentiful, says USDA. Wheat exports should increase 1.5 million tons to 30.5 million in 2000-01.

However, competition in the wheat trade could be keen as expanded acreage and nearly ideal growing conditions should produce a record European Union wheat crop, forecast to increase 9 million tons from 1999-2000. Lower internal prices from the Agenda 2000 reforms and a weak currency may allow for some exports without subsidy as well as increase internal feed consumption, says USDA.

On the import side of the coin, severe drought has slashed production prospects in Algeria, Morocco and Tunisia and will increase imports 1.6 million tons to near record levels. Despite a larger crop, Egypt is expected to increase imports due to low stocks.

Iran should import a record 7.l5 million tons, a 5-million-ton increase from two years ago, because of a second drought-ravaged crop. Continuation of the United Nations oil-for-food agreement with Iraq probably will keep imports unchanged.

Although China’s wheat crop is expected to decline 8 million tons due to reduced acreage and yields, imports are expected to increase less than 2 million tons since stocks remain large. Total use is expected to decline as farms shift from lower quality feed varieties. But higher imports also are expected in Indonesia, Malaysia and the Philippines due to continuing recovery of economies in those countries. South Korean demand is forecast unchanged from last year.

Wheat production in the former Soviet Union region should decline 2 million tons as a much smaller crop in Kazakstan offsets more modest increases in Russia and Ukraine. Imports should decline because of a larger Russian crop but exports should decline because of limited exportable supplies in Kazakstan and Ukraine.