COARSE GRAINS -- Consumption, trade, production in 1999-00 expected to slip from previous season.

by Teresa Acklin
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World coarse grains trade in the current marketing year is estimated to decline by about 2 million tonnes, or 2.5%, from the 1998-99 season amid a slight easing in demand. Global production of coarse grains is projected to drop by 15 million to 20 million tonnes, or about 2%.

Among individual coarse grains, maize is forecast to experience a decline in 1999-00 global trade of more than 3% from the previous marketing year, with world maize production declining by less than 1%. Although global maize consumption is expected to increase by about 10 million tonnes, ending stock levels should expand by as much as 5 million tonnes, with increasing stocks in China and the United States likely to account for most of the build-up.

China experienced a serious drought during the maize growing season, which affected yield. But the anticipated reductions in China's 1999-00 maize output were tempered by larger-than-expected planted area, resulting in estimated Chinese maize production of about 128 million tonnes, second only to 1998-99's record harvest of 133 million.

As a result of its improved supply numbers, China now is expected to export about 5 million tonnes of maize in 1999-00, compared with 3.5 million in 1998-99. Even larger export volumes are possible, but that development is expected to be moderated by low world prices, which would require China to provide subsidies to sell at competitive price levels.

In the United States, the 1999-00 harvest season reaped about 240.5 million tonnes of maize, down 3% from the previous season. Planted area declined in 1999-00, but yields reached the third-highest level ever.

U.S. stocks entering the 1999-00 season were the largest since 1992-93, and the surplus is expected to grow by another 5 million tonnes by the end of the current year. Exports are expected to slip by 8.6% from 1998-99, and total U.S. domestic use is projected to remain basically flat, with feed consumption projected to advance by only 0.3%.

This supply/demand balance sheet and the expanding surplus should keep pressure on U.S. maize prices, and subsequently, on world price levels. The U.S. Department of Agriculture recently estimated maize prices to U.S. farmers probably would remain in a range of U.S.$65 to U.S.$80 a tonne through the 1999-00 season, about U.S.$5 a tonne lower than in 1998-99.

In other regions, South Africa is forecast to see a 20% increase in its maize harvest. Although that country's supplies of white maize should be more than adequate to meet domestic needs, yellow maize is projected to remain in deficit. Total maize export estimates for South Africa range from about 500,000 tonnes to slightly more than 1 million tonnes.

Economic recovery in Southeast Asia has prompted improvements in the poultry industries of several countries, creating renewed growth in maize demand. Malaysia, for example, is forecast to import as much as 2.4 million tonnes in 1999-00, nearly equal to the two consecutive record import years ending in 1997, when imports reached 2.41 million and 2.49 million tonnes.

Thailand's poultry and feed industries also are on the mend, and feed use of maize is projected to reach a record of about 4.2 million tonnes. With production estimated at 4.3 million tonnes, maize imports will be limited.

Global barley trade is projected to remain robust, based on continued healthy demand from the Middle East and North Africa. The European Union again should become the world's largest exporter, with barley shipments projected to reach a record 9 million tonnes.

The E.U. trend of feeding wheat at the expense of coarse grains is expected to continue this season, assuring ample exportable barley supplies. Because the barley supply-demand outlook is tight relative to maize, barley prices should be firmer, enabling the E.U. to export with smaller subsidies.