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September 24, 1974
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Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 Z4L2?,0R7 ;.i.DU.I FOR: .lr. I:otstl~-c{ :~. 1'ort:!~?.t:,ston U: 7nty . - :.; ~. tiu1t :, ?. 'r c Lary x or 7:7vc: t, C:11't Policy of t u Tz:c-- Bury SU13 3B'CT : T'x: ar1^rai.'; t0.1 Of CIA ArL 1J. j .~a .`'.3 Of 1';ar1c1 Supply and ~^: aand or Grain, 1974/75 1. In response to a request by your o2i: on 4 SCp 14.;t~r be we i% r c 'l:.'_"cInr'i;;it ?ig a t.,it1 y of t h 'o :o 1c! `-Ccx c-;rzLin. 1~;C! thrujt oL. tha US'; and corn in tiie 5, 2. i:t:causc, or the 1(~c;iblc i.n. L,2 :cot o.r c1o\rorr 1~:Ii'1:a Cv..?; J"4 C: i. :. .Ltd 4~1J J subicct, thi.`. (Y :tico iray ::end ti )?a'y'-cr to oth r a11u-ia of tc.cJ. offici 13 . shoalci }acs di ractc..l to 3. c,,voric .;Ui2r'crni11. On file Department of Agriculture release instructions apply. AL-?tac.11':::llt.: the contriautio11 C i.-.i: Lv ustria1 tii.ticrlss l)ivisi.o:i Oi1icc: of i:coilouic 1 c:search State Dept. review completed Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 World Supply and Demand for Grain, 1974/75 (With Emphasis on Demand for US Wheat and Corn) Office of Economic Research Central Intelligence Agency 23 September 1974 Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 World Supp y and Demand for Grain, 1974/75 IntroductJcn This report provides alternative estimates of world export supply and. demand for grain. It compares CIA estimates with those of USDA Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 International Wheat Council. The analysis is aimed at determining the foreign import demand for US wheat and corn in fiscal year (FY) 1975.** Any forecast of the 1974/75 world grain situation must be very tentative. Supply and export availability estimates include forecasts of coarse grain not yet planted in the southern hemisphere, wheat and corn harvests not completed in the Northern Iiemi_sphere, and rice crops yet to be harvested in Asia. Demand analysis is hindered by limited knowledge on the impact of shar~,,price..rises on utilization of grain for feed. Also, there is an incomplete understanding of how worldwide inflation is affecting effective demand. Principal Findings The 1974/75 world grain situation has tightened in recent weeks. A 3v decline in total grain production rather **Fiscal years in this report refer to 1 July - 30 June. and, when applicable, the Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 than an increase from last year's record level is now forecast. Cuts of nearly 40 million tons in US grain estimates and lesser reductions in those for. Canada and Russia are responsible. CIA estimates that world wheat production will be down 20 million tons* to 347 million tons in 1.974,'75, 13 million tons below USDA's estimate. Exportable supplies of wheat have been reduced to about 58 million tons compared to the 64 million tons exported in FY 74. Worldwide import demand for' wheat is estimated by USDA to approximate expbrt supplies at 59 million tons. CIA estimates indicate an excess import demand of .3 million tons. Both estimates point up a tight situation permitting no build-up in stocks or softening of prices. CIA estimates that total foreign demand for. US wheat in FY 75 will exceed USDA's projection by over 2 million tons. At an export level of 28 million tons (1,027 million bushels) carryover stoca:s on 30 June 1975 would be reduced to a new record low. Canadian transport problems and likely higher import demands by India could put additional pressure on US supplies before January. The supply situation for corn is tigher thati Thr wheat. Sharp cuts in US harvest: prospects -- the world's largest producer ^t,1etric tons arr_ used th- oughout this rbport. 2008/11/06: CIA-RDP85T00875R001900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 and exporter -?? are directly reflected in a 20% drop in export availat?ilities. Large US feedgrain stocks used to support a high export level during the past 2 years are no longer available. CIA agrees with USDA that foreign demand for corn will be 'down because of high prices, but projects less of a reduction, especially for Europe. CIA estimates that export demand for US corn in FY 75 will approximate 23 million tons. This projection is over. 3 million tons above USDA's projection of 19.7 million tons (775 million bushels). CIA's higher level, of export -- assuming no change in USDA's estimate of domestic usage -- -would draw down stocks by 5 million tons. 25X1': Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 25X1 Supply/Domand Situation for Wheat ,World Production of Wheat, 1974/75 1. World wheat production, according to USDA estimates, is expected to fall 7 million tons short of last year's record output of 3G8 million tons. An International Wheat Council (IWC) press release in early September gave a production forecast that ranged from 6 million'tons below to 3 million tons above 1973/74. CIA considers both of these estimates to be optimistic -- partly based on more recent information --- and has reduced USDA's projection by about 13 million tons to 347 million tons, 20 million tons below last year. This includes the lower estimate of the US wheat crop released by USDA on- 11 September. 2. Important differences in production forecasts for major exporting countries are those for Canada and the USSR. We have estimated the impact of unfavorable weather on wheat yields in both countries to be. more serious than USDA. For'the USSR, the CIA estimate is 10 million tons lov.,er than'USDA's 95 million tons. In Canada, drought and recent frost damage have lowered earlier wheat estimates by 1.5 to 2 ;u.i.llion tons. The 1 September official Canadian estimate put the wheat crop at 14.7 million tons -- 1.5-million less than U::1DA's 20 August report --- and subsequent frost Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 damage has further reduced the crop. Reports from both East and West Europe indicate that wheat harvests are better than expected. Export Availabilities 3. There is agreement between CIA and USDA estimates that the quantity of wheat available for export in FY 75 is less than a year ago. We forecast that the major exporters will have 5 1/2 million tons less wheat for export (Table 1) and USDA about 3 million . The US and Western Europe account for most of the drop despite record wheat harvests. Unlike the past 2 years, when the US. exported over 31 million tons by drawing down stocks, wheat is no longer available in such quantities. The European Community (EC) is expected by USDA to feed 3 to 4 million tons more wheat this year to replace imported corn and ' e agree. This in turn c;=ill reduce exports from the region by 2-3 million tons compared to last year.'s.level of 6 million tons. 4. Australia and Argentina are both expected to boost exports but not enough to offset the US shortfall. Canada -- with s'tocks' equivalent to a 2 year domestic supply on hand -- could have increased exports over lust year's level until hit by transportation strikes in early September. We now estimate that they may even have difficulty moving as much grain as last year. Argentina's level of export will also be limited. Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 Table 1 P,heat and Flour Exports by Selected Countries Million Metric Tons Forecast FY 75 FY 73 FY .74 CIA USDA Argentina 3.5 ? 1.1 3.0 3c0 Australia 5.5 6.0 8.2a/ a.5 Canada 15.6 11.5 11.5 12.2 W. Europeh/ 7.3 6.5 4.0a/ 4.0 USSR 1.3 5.0 4.0 5.0 US. 32.0 31.0 25.8c/ 25.8 TOT;tL 65.2 61.1 55.5 58.5 ? a/ :did-_ oint of range b/ Excluding intra EC 9 trade / Based on USDA forecast of 950 million bushels by transport constraints rather than supply. 5. Two major sources of uncertainty in the wheat .export supply estimates -- other than the transport problem are (1) whether the Canadian Government or wheat board will decide to draw down stocks for export, and (2) the extent to which wheat will be substituted for imported feed grains in the European Community (EC) and other exporters. World Import Demand for wheat, 1974/75 6. CIA agrees with USDA and IWC forecasts that total world import demand for wheat will he less than the 64 million tons (excluding intra EC-9 trends) imported in FY 74. There are differences, however, on the extent of the drop. IWC and USDA estimate that demand is down by about 5 million tons and CIA by only 3 million tons.. None of these estimates fully reflect the need of South Asia for larger imports of foodgrains for which they must have some foreign aid. 7. USDA and IWC estimates imply a balance-between supply and-demand entailing no drawdown in stocks. our estimates show an excess demand with resultant strong, upward pressure on prices and stock draw downs. a. If. is difficult to pinpoint all the differences between the estimate; because USDA provides demand estimates Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 for only selected countries or regions. It appears that. the major differences are on India and the PRC. For each country our estimate of demand exceeds that of USDA by at least 2.5 million tons. 9. FY 75 import demand requirements for wheat are currently being obscured by a number of factors difficult to analyze. These include: ?Unknown influence of tight feed grain supplies on use of wheat for feeding livestock; ?Whether the size and quality of wheat stocks held by the USSR will forestall sizeable imports; and ?Stockpiling policies of certain Middle East countries. Foreign Demand for. US Wheat .10. We agree with USDA estimates that export demand for US wheat this year will be less than in FY 74, but by a smaller amount. CIA forecasts FY 75 export demand at about 28 million tons (1,027 million bushels), approximately 2 million tons above USDA's 25.8 million tons (950 million bushels]*. This compares with exports of 31 million tons of wheat and flour last year. An export level of 28 million tons is feasible, but carryover stocks on 30 June 1975 would be down to a record low of 6.3 million tons (224 million bushels) or equivalent to domestic requirements for 14 weeks. On the other hand, USDA's smaller level of export would permit a small increase (52 million bushels) in carryover stocks. Private C{-j~ptn of USDA's projection of 900-1,000 million bushel. Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103- grain brokers indicate that carryover stocks of 150-200 million bushels are needed for orderly marketing. 11. CIA estimates by region and selected countries are compared to those of USDA and outstanding export contracts (SOES)* as reported by grain brokers to USDA in Table 2 and described in the Appendix. Unli kp +-t,~ -_4+?x,4-4,,r. ,4- exports xor the entire marketing year, the SOES on 1 September 1974 represented less than 500 of projected exports for the year. Only for the European area does the SOES exceed USDA or approach CIA estimates. 12. The smaller amount of US wheat on export contracts (SOES) so far this year probably reflects less speculation, reduced demand at the higher prices, full impact of recent unfavorable crop developments not having reached the market, and co;,nercial market participants approaching the market in a more orderly fashion. Factors which could put additional pressure on US wheat supplies before January include: ?, such as Japan and PRC, switching from Canadian to US wheat because of Canadian transport problems; 30 August plus Outstanding for ! :1i: balance of --Export Sales ~? 1 15 as reported by US grain brokers to USDA on 1 September 1974. Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 Table 2 Estimated Demand for US wheat and Flour Exports Destination :astern Hemisphere: Mexico Brazil Chile Colombia Peru Venezuela Central America Others Sub-total Europe: USSR Eastern Europe European Communics Belgium-Luxembourg France Italy Netherlands United Kingdom West Germany Other Other West Europe Sub-total Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 Japan India Taiwan People's Republic of China? Korea, South Iraq Iran Israel Philippines Bangladesh Indonesia Pakistan South Vietnam Turkey Other Algeria Egypt Morocco Nigeria Sudan Others Sub-total (In Thousand Metric Tons) CIA USDA' 800 900 1,300 1,000 500 750 380 430 645 500 635 600 345 920 600 ' ,7 , _ 67 2 6 5 5,100 500 200 550 500 2,290 2,200 (200) (200) (170) (600) (800) (300) (20) 520 500 3,860 3,400 3,200 3,000 2,500 2,300 700 600 3,000 2,400 1,700 445 1,000 300 480 700 30 400 150 600 895 16,100 SOESo_/ 1 Se[ t . 74 375 244 52 59 257 66 134 '466 1.653 297 151 3,143 (74) ;43) 425) ;890) (142) (1569) (0) 24 3,615 92: 1,482 235 1,855 485 442 1,094 238 210 254 69 206 0 454 219 14,000 8,170 ?700 500 212 1,000 950 59 260 200 92 270 300 164 150 150 6 410 ].00 107 2,790 2,200 6.90 Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 CIA USDnb/ Destination Total Wheat 27,955 24,700 Flour and Products f 1,300 d Flour 27,955 26,000 Total Wheat an Unspecified destination Total Wheat (known and Unknown destination) --' Mar eting year, 1 July 1974 through 30 June 1975. Statisticsl data shown were supplied by Grain and Feed Division, FAS/USuA on 5 September. 1974. Wheat shipments inspected for export, 1 July 1974 though 1 Sc-pte-.bcr 1974 plus outstanding export sales as of 1 Septet:zher for the balance of FY 1975. ections Flour included with individual country's wheat ipor= pzo] in grain equivalent. Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 z ?USSR unwillingness to provide India with 2 million tons of wheat; Deterioration of grain prospects in the southern hemisphere; and ?Adoption of policies by Canada and the EC that would restrict wheat exports below present projections. The major differences between USDA and CIA export are centered in Asia and Africa. Differences le estimates are not as large as shown, because flour e not broken out for individual countries-in USDA -ertheless, our estimates for India, PRC, and Taiwan g1jer. Poor monsoon development in South Asia, I i nd a, indicate additional commercial purchases, f requests for aid, could push imports from the ove current projections. Also, tight sorghum lave caused Indian buyers to switch to US wheat. a cutback in EC exports, African buyers will be turn to the US and other exporters for a*larger their wheat and wheat flour imports this year. In have allocated somewhat larger quantities of o this region. Approved For Release 2008/11/06: CIA-RDP 85T00875R001900030103-1 I Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 World production of feedgrains in 1974/75 is .to be down by almost 3 percent -- to 581 million in 1974/75 compared to 599 million tons in 1973/74. uction lived up to earlier expectations, there been a 35 million ton increase in world feecgrain rather than a decrease. World production of corn d similarly with production of the major exporters iost 6 from 158.8 million tons in 1.973/74 to 149'.8 1974/75. IIowcvcr, while US corn production is Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 Supply/Demand Situation for. Corn, 1974/75 The world supply/demand situation for feedgrains can be expected to be tighter than in 1973/74. ish economic conditions have brought some relief Ind side through the declining demand for moat, itions have deteriorated in recent weeks. Production in the US -- a wet spring causing late p] dry weather in the critical summer months in the nd a severe drought in the southwest -- have been for upsetting 1974 world feedgrain production. Crop dry weather in Western Europe has also taken place, act is not yet clear. A good Southern Hemisphere .,artier this year has helped ease the supply situation, art problems in Argentina and South Africa introduce of uncertainty in the export picture. ction of Corn, 1974/75 decline by 12% to 127 million tons, production Via, South Africa, and Thailand is estimated to be 150% to over 24 million tons. labilities rica and- Thai.] and, but US stocks will be scverei.y straincd. South Africa in 1973' which sharply reducdd xports. Slight corn stockbuilding Lake place Because of the lowest world feedgrain stocks in years, the corn export availabiliLy shows the of the production shortfall. The export availability corn exporter, South Africa, shows an increase (see Table 3) This was due to a severe production Table 3 Corn Exports of Major Exporters FY 74 Forecast FY 75 35.0 23.1. 5.1 4.9 .4 4.0 2.1 2.0 42.6 34.0 acts and high grain prices. The EC is expected to Worldwide import demand for corn in FY 1975 is t 35.5 million metric tans -- a 20% drop from.last. lower import demand is due mostly to depressed live- Irt Demand for. Corn its use of internally produced grain for animal Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 JLLEGIB at in place of imported corn and to reiuce corn lie EC is expected to feed an additional 3 million 1-2 ,million tons. Also, livestock producers a o expect I e corn imports by more than 1 million tons. brld market prices. The Pir i^ a1 (corn this year because of large grain stocks ,an be expected to food less grain to livestock the high ratio of feodgrain prices to livestock c USSR, which imported over 5 million tons of dear, is not expected to import significant and for. US Corn IA. estimates foreign demand for US corn at 23.1 s,-- 3.4 million tons above USDA's latest estimate Ilion tons. The US exported about 35 million tons st year. The major differences for this year between DA estimates are centered on Europe, the largest importing e Table 4) CIA estimates the,EC total import needs from third at 12.2 million tons of corn -- a drop of 19% from lion tons imported last year. Assuming that the EC {.2 million tons each from Argentina and South Africa L ~c 7.8 million tons of corn to be obtained from the I1css than 9.3 million tons last year. USDA estimates of US corn at 6.5 million tons. The EC as of 1 September ~y been shipped or contracted for 13.6 million tons of PY 75 according to US exporters. llowovcr,, past - 15 -. Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 ILLEGIB SOESc/ 1 Sept.-1974 817 624 1441 264 1165 (760) (450) 135ril 1137 (62) (645) (430) Japan 6200 65 Taiwan 1 00 7938 People's Republic of 00 China 8 200 98 South Koren 0 23 Other 570 575 Sub-total 328 7450 7600 8962 Africa: 645 400 23 Total corn -- 19,500 26,583 Products d/ 200 -- Total corn and products 2.3',13.5- 1 On Unspecified destination -_~ "- 5,9SS Exports on brokers' accounts e/ --- Total 3Z, b14 a 1 July 1974 through 30 ,7une 1975. b/ Providecl by 1'AS, USDA; numbers are approxi,-Hate. c/ Corn shipn;ent:; inspected for export 1 July 1974 through 30 August 3.974 plus out-standing export sales as of I. September 1974 for he balance of the 1974 marketing year and all of the October 1974- September 1975 marketing year. This assumes that Most contracts made so far are for delivery of US corn before 1 July 1975. It also assumes that. corn contracted for but not delivered by 30 September 1.974 (the and of the 1974 US corn marketing year) will be re-ncgotiated for the 1975 marketing year. This adjustment of data from. a market.i?pg year to a fiscal year may overstate outssanding sales to known destination by as much as one million tons. Data compiled from USDA, SRS, Grain %Iarket News and from USDA, SRS, I::or. t?s. cl/ PProductn included with individual countries' corn import estimates. o/ Unsold corn shipped abroad. Destination Western 11emis here: CIA USDAb/ Canada 700 Other 1220 Sub-total 1920 1900 Europa! USSR 230 0 Eastern Europe 1750 900 East Germany (1000) Poland (600) Other (150) European Community 7800 6500 Other Western Europe e 3340 2200 Spain (300) Other (2000) Sub-total (1040) 7 77n or nn Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 25X1 Table 4 Estimated Demand fat U.S. Corn Exports 1974/75?/ (In Thousand Metric Tons) Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 experience indicates that (1) all of this will not necessarily be delivered (hedging against possible US export controls)', (2) corn from other countries can be used to fulfill the contracts, avx,(3) some of the grain will be re-exported -to other European countries. .20. Total corn import demand for other West Europe is estimated at about 9.6 million tons with the US share at 3.3 million tons c mpared to the USDA estimate of 2.2 million tons. Total requirements for Eastern Europe is estimated at 2.0 million tons with 1.75 million tons from the US. USDA places US corn exports to Eastery hurope at 900,000 tons. While shipments plus outstanding sales for both of these regions are lower than CIA estimates, we believe that trans- shipments from the EC to both regions will make up at least part: of the discrepancy. 21. The estimates of both world import demand and US export demand are indicators of market pressures rather than estimates of final exports. Using the CIA estimate of US corn export demand and USDA's latest estimates of domestic production and usage, US stocks as of 30 June 1975 would be drawn down by 5 million tons (200 million bushels). It would appear that the US could export 23.3 million tons if conditions ,-- domestic usage and production --.are. . favorable. In any event, there will be additional upward price pressure on corn unless there are significant decreases in demand which arc not apparent now. CIA/017.11 23 Septoiuber 1974 Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103 1 'H i'Y , ; hi v Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 APPENDIX - A Situations in Selected Countries Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 Importing Countries Western I' Brazil Chile Colombia Mexico Peru Venezuela Contents Al 2 3 6 6 7 10 10 10 11 11 12 13 Asia Bangladesh Burma Cambodia India Indonesia Iran Japan Malaysia Pakistan Peoples Republic of China Philippines Saudi Axa',!ia South Korea South Vietnam Sri Lanka Taiwan Turkey Europe Eastern Europe USSR Western Europe Africa Algeria Egypt Morocco Nigeria Sahel Oceania New Zealand 14 14 15 15 16 18 19 20 21 21 22 24 25 25 27 29 29 30 31 31 34 7 36 36 36 37 38 39 40 X10 Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 ? Major Exporting Countries Argentina Australia Canada South Africa Thailand Western Europe and the EC Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 Major Exporters Argentina Assuming normal growing conditions the 1974/75 wheat harvest beginning in December should be about 7.5 million tons, 20 percent above last year. Higher support prices have induced an expansion of the area sown to wheat to the 1972 level of 5 million hectares. On the other hand, output of the two principal feed grains, corn and sorghum, are expected to be down by at lest 10 percent. Despite an overall net reduction in total grain output, large carryover stocks should provide export availabilities of both cheat and feed grains in FY 75 well above the previous year. Million tons Anticipated Export Actual Production Exports Availability Shipments 1_973/74 1974/75 FY 74 FY 75 FY 75 Wheat 6.2 7.5 Sorghum 6.0 4.8 Corn 10.0 9.4 1.1 3.4 3.0 2.7 5.1 5.5 Actual grain shipments will, fall some 10 percent below estimated availabilities because of inadequa:e transport and storage facilities. Grain shipments from the 1973/74 crop to central elevators are currently running I million tons behind schedule: with about 3 million tons of corn still in rural areas. 25X1 Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 A2 Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 About 1 million tons of sorghum was destroyed on the stalk by heavy rains. Port congestion also is causing backlogs S?.n deliveries and a decline in commitments for new grain sales. Austra'lia Australia's last December-January wheat harvest totaled about 12 million tons, third largest cn record, resulting mainly from a more than 20 percent: increase in acreage. Taking into account carryover stocks and an estimated output of 11.0 million tons from the 1974/75 harvest, the Australians should have 8.1 - 8.3 million tons available for export during FY 75. About 6 million tons ware exported during FY 74. The, area sown to barley, Australia's second largest grain export, declined last year because of the expansion in wheat acreage. :;till, a good crop was harvested and production in 1974 was up nearly 40% over 1973. The outlook is for a harvest of some 21,i million tons for marketing next year, which should leave 1.3 million - 1.4 million tons of barley available for export during FY 75, comp,:v:ed with an estimated 1.2 million tons exported during FY 74. Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 Million tons Canada S.heat: Canada's 1974 wheat harvest is now forecast at about 14.7 million tons -- 1.5 million tons below last year's level of 16.5 million tons. A 5% reduction in sown acreage, late planting, drought, weed growth, and grasshopper infesta- tions are the factors responsible for the expected decrease Wheat 12.0 11.0 6 8.1 - 8.3 Barley 2.4 2.6 1.2 1.3 - 1.4 in production. Output could drop even further when the damage from recent frosts is-evaluated. Export Production Exports Availability 1973/74 ' 1974/75 FY 74 FY 75 Klli.on tons Export Production Exports Availability 1973/74 1974/75 FY 74 FY 75 Wheat 16.5 14.7 11.5 11.5 Barley 10.3 10.1 2.7 2.7 Wheat export levels in FY 75 are still uncertain due to transport problems and lack of information on Canadian intentions to draw down stocks. Despite a smaller output, exports could reach the 11.5 million metric tons moved last year if the Canadians chose to drawdown, stocks -- now eguivalenl,.- to a two year domestic supply -- and there are no further or prolonged di: ruptions in the transport system, Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 In addition to the production shortfall, transport delays -- due to current strikes affecting both East and West coast ports and a traffic accident in the Welland Canal -- now are expected to hold Canadian exports of wheat and feed- grains 1.1 million tons, or 80, below our earlier estimates for FY 75. Total grain exports consequently will be no larger than last year's level of 15.7 million tons, including 11.5 million tons of wheat, 2.7 million tons of barley, and 1.5 million tons of other grains and oil seeds. The level of wheat exports may be even lower depending on stoclk withdrawals and Pricing policies of the Canadian Wheat Board. In FY 74, the Canadian Wheat Board raised its prices well above those of the US market in anticipation of -shortages in the United States. If a similar policy is followed again this year, export volume would tend to be depressed, especially for sales to LDCs already hard pressed by high oil import costs. Also if feedgrain prices escalate, Canada may use its transport capacity to export more feed- grains instead of wheat. An examination of foreign demand for Canadian wheat by country also indicates a tentative export of 11.5 million tons. Of.- this amount, over one-half is expected to go to Canada's four largest consumers -- Japan, China, the USSi; and United Kingdom. Inclement weathcr. conditions have lowered Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 harvest 'prospects in China and the' USSR. China has already increased imports by one million tons and the USSR is ex- pected to approach Canada seeking 1.5 million tons. Japan is expected to again increase its import demands, and the UK, although decreasing its demand slightly in recent years, will still account for over one million tons. India, usually a major factor, has already received grants of 140,000 tons. High prices wi].l probably keep India out of the market with hopes of an additional grant from Canada of 160,000 tons. The balance of our export estimates are based on. past data available from the IWC and assumes Canadian wheat exports to regular customers. Feedgrains: Canada is a net importer of corn; probably about 700,000 tons from the US in FY 75 compared to 785,000 tons in FY 74. The barley harvest this fall is expected to reach 10.1 million tons, just short of the 1973 crop. Increased stocks, however, could make 3.7 million tons available for export, compared with about 2.7 million tons exported in FY 74. Yet actual export may not exceed 2.7 million tons due to the transport problems mentioned earlier. r Al Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 . Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 South Africa South Africa is the third largest world exporter of corn. The 1974 crop, harvested in April-June, amounted to a record 11.7 million tons, compared with the drought-stricken 5 million ton crop in 1973. Even so, transport will lir'-.c export,: to about 4 million tons in FY 75, a dramatic increase over the 400,000 tons exported in FY 74 and slightly above the 3.6 million tons exported in FY 73. Based on past trends, Japan can be expected to purchase 1 million - 1.5 million tons and the UK about 1 million, tons. Taiwan has contracted about 450,000 tons. Most of the remainder will go to the EC and Venezuela. Thailand -,heat: Thailand produces no wheat, so will import almost 100,030 tons in FY 1975, all of it on strictly co,;mercia_ terms. Imports from the US are expected to be about 35,C00 tons, up from 30,000 tons in FY 74. Corn: Thailand is a large producer and exporter of corn. Prod ction of corn for FY 75 is estimated at 2.3 million tons, compared with 2.4 million in FY 74. Since. domestic consumption is between 300,000 - 400,000 tons per year, exports will decrease from 2.1'million tons in FY 74 to 1.9 - 2.0 n;illion tons in FY 75. Thailand has commitments to sell Japan 1.2 million tons of its 1974-75 crop. Commi 4:.en is to `1 are about 300,000 tons and to PRC 350,000 tons :?;i th the small balance going to other Asian nation.,;. Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 Western Europe and the EC Grain production in 1974 is expected by USDA to set a record of 137.5 million tons -- 3% higher than last year. The high output results from an expanded grain area of nearly 1 million hectares; yields remain at last year's level. Most of the increased area was sown to wheat, thus contributing to an expected boost in output of 2.8 million tons or, about 5%. Production of coarse grains may be up only 2% to 84.5 million tons but recent reports of dry weather in Europe could cause a decrease in production. Major gains in grain production will be registered by Spain, France, and Italy. Wheat: Little wheat is expected to be available for export by Western Europe from other than the European Community (EC). Given the record harvest of wheat and large carryover stocks in the EC, an estimated 10 million tons should be available for export or for livestock feed. -Recent forecasts of a poor US corn. crop, high prices on the world market, and US official pressure on the EC to cutback feedgrain imports, however, now means that more wheat will be fed livestock than earlier predicted. The EC Agricultural Commissioner recently told USDA officials that 500,000 tons of wheat/month will be substituted for feedgrains over the next six months. Thus EC exports of wheat outside the area in FY 75 are now estimated at no more than 3 million tors compared to six million tons the previous year. Considerable J, Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 25X1 Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 uncertainty obviously still surrounds any such quantitative estimates of export levels at this time. The main wheat importing area -in Western Europe is the. EC, which may import 4-5 million tons (excluding intra-EC 9 trade) in FY 75 compared with imports of six million tons in FY 74. Hard wheats are imported, as well as durum, for Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103- mixing with the domestic soft wheats by the milling industry. The final level of import will depend not only on the size of the harvest but also on milling quality and protein conf.Pnt of the wheat; both were unusually high a year ago. Feedgrains: Western Europe is a large net importer of feedgrain, especially corn. In FY 74, the region was a net importer of slightly more than 20.5 million tons. The US exported over 15 million tons of feedgrains -- mostly corn to Western Europe in FY 74,'including 11.5 million to the EC. According to August estimates of USDA, the region's FY 75 net import demand for feedgrains compared to last year is expected to drop by about 7 million tons. Demand for US corn is expected to fall from 9.3 million tons to 7.8 million. The predicted lower import demand is based on the expanded use of wheat as a fcedgrain and a smaller requirement for concentrated feed because of the depressed European live- stock industry. The excess supply of poultry products and pork has resulted in EC actions to reduce numbers of chickens and hogs in the coming year. Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 Stiiethcr the 'EC reduces imports as much as now forecast 25X1 remain to be seen. Export contracts for corn is reported by US brokers on sales to Western Europe are running ahead of those in FY 74. Undoubtedly these data are inflated as a hedge against possible imposition of US export controls, but there is no way of k noi'Ting how much. Also, EC imports of corn frcm South America and Argentina may be stepped up, which could put pressure on US corn supplies by other importers. It :::ay be early 1975 before the situation is clarified. Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 in FY 74. The corn harvest is expected to reach 15 million tons, 9% larger than last year. As a result, Brazil may export up to 600,000 tons of corn in FY,75, compared with only 41,000 tons in FY 74. Wheat: Wheat imports in FY 75 are forecast at 950,000 tons, below last year's level of about 1.1 million tons. Earlier forecasts for a substantial rise in wheat output and a big decline in imports have been revised because heavy rains and flooding delayed plantings and destroyed about 10% of the winter wheat crop. Chilean wheat consumption is stagnating, in part, because of an April 1974. decree limiting wheat use to human consumption. It is estimated that 500,000 tons of the FY 75 wheat imports will come from the US, 85,000 tons less than during FY 74. About 400,000 tons of US wheat have been scheOuled during the last half of this calendar year. Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 25X1 Western Hemisphere Brazil Wheat: A 21% increase in domestic wheat production to about 2.4 million tons this year will decrease the need for imports from 2.8 to 2.5 million tons. PY 75 wheat imports from the US are estimated at 1.3 million tons, compared with Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 Corn: Corn imports are expected to drop slightly to'250,000 tons -- about 25,000 tons below FY 74 imports. An excellent crop this year and forecasts for continued output increases next year will enable Chile to reduce imports, while increasing total consumption. The increase will be used mainly for animal feed. US corn will probably account for 150,000 tons of this year's imports compared with 126,000 tons last year. Colombia Assuming favorable weather conditions, production of most grains will increase substantially this crop year, reflecting success of government efforts to stii.ulate agriculture with credit, technical assistance, and price supports. Output of wheat is expected to increase by 806 to about 100,000 tons and corn by 30% to 760,000 tons. As a result wheat imports in FY 75 are expected to decrease to 380,000 tons, all from the US, compared with 470,000 tons ir. FY 74, of which 386,000 came from the US. Also Color:thia could be a net exporter of corn in FY 75 -- impo.rtinc 5,000 tons or less from the US and exporting 50 , 000 tons to other Latin American countries. Mexico Wheat: Mexican 1974-75 wheat production 'is estimated at 2.2 million metric tons, up 10,, from 1.973-74. Hocwrevcr, consumption is also increasing at a rate of about 104- per year which is expected to result: in imports of roughly 850,C C O Ei Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 tons including 800,000 tons from the US.' Mexico took 706,000 tons of US wheat in FY 74. Corn: Production of corn is expected to expand by 3% to 9.5 million tons in response to the recently increased support price and government provided incentives, such as credit. Nevertheless, imports of about 400,000 tons, all from the US, probably will be required in FY 75 (compared with 1.5 million tons from the US in FY 74) if the country is to meet its increasing domestic consumption and hold stocks at the current level of about 1 m;.llion tons (about 5 weeks supply). Peru Wheat: Peru's 1974-75 wheat production is estimated at about 160,000 tons or about 7% over last year. The government expected to reduce imports this year by about 8% to 720,000 tons through higher domestic prices and government import restrictions. However, more realistic estimates would put import needs at about 900,000 tons if shortages are to be avoided. The higher estimate means that Peru will probably need about 645,000 from the US. About 260,000 tons have been purchased and Peru asked in August for CCC credit for another 200,000 tons. Corn: Corn production will decrease slightly, about 3 percent, this year due to shifts from corn to cotton ?product.ion and short fertilizer supplies. Corn import needs could exceed 300,000 tons, most of which will be purchased from the US. About 220,000 tons of US corn went to Peru last year. Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 - I Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 Venezuela Little wheat is grown in Venezuela. Because of low stocks, wheat imports in FY 75 should be around 650,000 tons 570,000 FY 74. While 1974 corn production is expected to be up by 25%, an increase in corn imports is expected in FY 75 -- to at least 300,000 tons from 275,000 tons in FY 74 -- because of strong demand and government policy to increase poultry, pork,- and dairy production. Most of Venezuela's imports are expected to be South African ,.,.,........... ... Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 Bangladesh We estimate FY 75 good grain production at about 12.0 million tons -- not significantly different from last year's 11.8 million tons. This estimate includes allowances for recent flood damage. Imports of at least 1.8 million tons of foodgrains are needed in FY 75 to prevent a deterioration in already minimal grain consumption. (Grain imports in FY 74 totalled 1.7 million tons of wheat, of which 730,000 tons came from the US). This volume of imports will not allow for any .stock buildup and will sorely test the government's ability to keep its food distribution system operating. Imports now anticipated, including 150,000 tons of FY 75 PL-480 wheat and rice, will supply about 1 million tons leaving 800,000 tons to be arranged. The government is seeking to purchase more foreign grain as well 'as pleading with potential donors' for assistance. Government purchases will be severely constrained by a shortage of foreign exchange. A contract for 250,000 tons of wheat was cancelled in July for lack of funds. 'Additional foreign assistance will be required if the minimum 1.8 million tons are to be imported this year. Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103 1 a . Approved For Release 2008/11/06: CIA-RDP85TOO875RO01900030103-1 Burma Severe floods during August this year probably destroyed about 500,000 tons of rice, or about 10%, of Burma's annual output. This. loss will further erode the country's precarious foreign exchange position and accentuate the already tight domestic food situation. The tonnage, roughly equal to past annual exports represents a prospective loss of at least $1.50 million. Food short- ages arlier this year led to civil rioting in June, prompting a halt in rice exports, and government promises to alleviate shortages of food and other consumer goods through impor is. Burma would like' to import 15,000-20,000 tons of wheat in FY 75. The Burmese delegation.attendi,ng the ID1F/IBRD Governor's meeting in Washington in late September may use the occasion to sound out US officials on aid commitments, citing the recent flood losses as justification. If aid is not forthcoming, Burma will probably import only about 10,000 tons of wheat in FY 75, mostly from Australia. Cambodia Cambodia's rice import needs for FY 75 will depend not only on the size of its domestic ..arvest, but on the government's ability 'o procure this harvest and on changes .in the number of refugees residing in government-controlled Approved For Release 2008/11/06: CIA-RDP85TOO875RO01900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 areas. Government losses of territory and farmers, combined with shortages of fertilizer and spare parts, have kept domestic rice output at a fraction of pre-war levels. The 1973/74 crop was one-fourth that of 1969/70, the last pre-war harvest. Although it is still early to estimate the 1974/75 crop, it will probably not be significantly greater than last year's because of continued military operations and reduced availability of fertilizer. As a result, requirements of imported rice for FY 75 will most likely be about the same as la3t year's or on the order of 300,000 metric tons. Corn, once an important export, now is imported pririarily for animal feed. Domestic corn output, as with rice production depends largely on military developments. It is unlikely, however, that Cambodia's corn import requirements will fall much below the level of 5,000 tons. Cambodia is completely dependent on foreign aid to finance imports. Foreign exchange earned by exports will cover less than l00 of the country's anticipated imports in 1974, and exchange: reserves are currently running at less than two months' worth of imports. India The fall grain harvest, which accounts for two-thirds of annual grain production, will fall below last year's out- put of 67 million tons. The US Embassy estimates production Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 between 59 and 64 million tons depending principally on rainfall during the remainder of the June-September monsoon. At the lower end of the grain production forecast -- 59-61 million tons -- India will need imports of 7-8 million tons or more in FY 75. Production at the high end of this range -- 62-64 million tons -- would reduce grain import requirements to about 5-6 million tons. India already has arranged imports of about 2.8 million tons of grain, mostly through comae rcial purchases. About 500,000 tons of sorghum is included in the total; world shortages of sorghum will likely preclude India buying more. India has discussed with 'US officials a need for 8 million tons of concessional grain imports, from all sources during the next 18 months, but prospects for such aid are poor. New Delhi is seeking a repeat of last year's 2 million ton grain loan from Moscow. The USSR, however, now appears unwilling to provide additional grain. New Delhi is also seeking l million tons of wheat from the EEC which is not likely to materialize. So far, however, India 'has not officially requested a resumption of PL-480 grain shipments. Instead, India would like grain provided on. long term credits, or barter terns, or indirectly through the UN. Foodgr.ain imports are a major part of the import bill India faces over the next. 12 months. rood, petroleum, and fertilizer import requirements will cost about $3 billion, some 80-90'0~ of export earnings. With foreign exchmgc Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 7 Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 reserves of $1.4 billion, India will need foreign aid beyond existing commitments to meet its import bill. 'Indonesia Wheat: No wheat is produced in Indonesia. As a part of its planned imports of 720,000 tons in FY 75, the government has requested 100,000 tons of US PL-480 wheat. Such a grant is not necessary, however, because Indonesia can afford to purchase wheat commer gially with its large new oil earnings. If forced to buy wheat commercially, it is unlikely that Indonesia will buy more than 30,000 tons from the US and 650,000 tons in total. In FY 74 wheat imports totaled 880,000 tons of which 474,0.00 tons were from the US (227,000 tons under PL-480). Corn: Corn production in Indonesia is sufficient to meet domestic needs. Although exports of high grade corn for human consumption are forbidden, exports of fodder-type corn for animal feed are allowed. Exports of fodder corn are expected to be about 100,0,00 tons in FY 1975, possibly to Singapore. Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 . Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 Iran Wheat: Earlier predictions of a record wheat harvest have been revised due to the lack of rainfall in April, May and June which seriously affected dry-:Lind wheat and a significant area of so-called irrigated wheat. FY 75 production is now estimated at 3,900,000 metric tons -- slightly under the 3,950,000 metric tons harvested last year. Iran will continue to loot: to the US for wheat .imports to supplement its domestic production. In FY 74 the US supplied Iran with 90% of the one million tors of wheat imported. Under pressure of increased consumption requirements and a desire to boost stocks, Iran will be in the market for 1.3 million tons of wheat in FY 75 with one million tons of that to come from the U.S. Corn:. A small percentage of the total supply of corn in Iran is produced domestically. The major portion of the balance has historically-come from the US. The growing demands of poultry and livestock for feedgrain has increased imports of corn into Iran from a yearly average of 25,000 ton in 1969--72 to about 105,000 tons in FY 74. According to the US agricultural attache, FY 75 imports will be 250,000 tons, including 225,000 tons from the US. Approved For Release 2008/11/06: CIA RDP85T00875R001900030103 Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 ? Jar; Wheat: Japan's FY 7!i wheat imports are expected to total about 5.7 million tans, up from 5.4 million tons in FY 74. This increase of 51 is in line with the longterm average growth in consumption. Tokyo has assured US officials that imports of US wheat will be much the same as in FY 74, or 'about 3.2 million tons. The Japanese apparently expect Canada and Australia to supply somewhat larger amounts than they did last year. Corn: Japanese corn imports, which jumped by nearly 20% to 8.2 million tons in FY 74, should increase only slightly this year. The abnormally. large increase in imported feedgrain occurred last year to replace rice, which had been a major source of animal feed until stocks ran out. This year's estimate is subject to change, however, depending in part on the availability of other feeds, especially sorghum and soybeans.. Japan, which normally imports two-thirds of its feed- grain from the United States, bought about 7.0 million' tons of US corn in FY 74. Because shipments from Thailand and South Africa are expected to increase to more than 2 million tons this year, Japan's imports-from the United States should decline to about 6.2 million tons. Until mid-July the Japanese stayed out of the market in anticipation of a price decline. Since then, however, they have placed orc1ors for more US corn than is needed in FY 75. Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 ' 25X1 Malavsia WWheat: Traditionally Malaysian import requirements for grain have been obtained from nations in the Southeast Asian region. talaysian wheat imports from the US are expected to be about 10,000 in FY 75 (down from 15,000 tons in FY 74), while the remainder of the 375,000 tons of wheat requirement will come from Australia. CV: Although 23,000 tons of corn were imported from the US during FY 74, this etas an anomaly resulting from the shortfall of the Thai crop that year. Corn imports from the US could be as much as 15,000 tons in FY 75, with the remainder'of the 200,000 ton corn recuire:-ent coming from Thailand. Pakistan Government estimates of Pakjstan's 1974 spring wheat harvest ;.:ere lowered. recently from 8.6 million tons to between 7.5 and 8.0 million tons. (Our Agricultural Attache is holding his estimate at 8 million tons.) We estimate ;..heat imports for FY 75 at 800,000 tons. In Fy. 74, 1.1 million tons of wheat were imported, in part to make up losses incurred in the August 1973 floods. About 500,000 tons came from the US -- 109,000 tons under. PL-480. Wheat imports will go to the government's ration shops tO 5:~~~ ~1 ::.e nt ::L} an COi1::l1:T.Jtion at subsidized rates. The Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 gove~?::-._ :t is .;.cut one million tons short of its supply goal o~-- 2.2 million' tons.' Domestic procurement has been ha;.pcr ed by the smaller than expected spring wheat harvest and te co?:err-~::t`s below-market procurement price. Pakistan ':as already purchased 200, 000 tons of US wheat and expects donations from various countries to total about 100,000 tons. Isla..^abad has indicated it must import at least 500,000 tcns more and is pushing for PL-480 assistance and C CC credit_. nation as in a reasonably good financial position due to the recent rescheduling of its foreign debt, a $500 million aid commitment from. consortium countries and several hundred million in loans from oil-rich Moslem countries. Ncnetheless, import costs have soared while markets for its principal exports -- cotton and cotton textiles are sagging. frost in the south. The fall-harvested Peoples Republic of China The PRC appears to be headed for another disappointing harvest and record foodgrain imports. Output in 1974 will likely,, fail. to reach the 250 million tons harvested in 1973 and may fall tee? o,?r the 236 million tor level of 1972, China's poorest harvest in recent years. Yields of early harvested grain crops -- .?.`hich normally account for 4010'- of China's grain were be-low nori.iai because of drought in the Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 crops have heen a::verseiy affected by the late arrival and harvest of is:ter::.adiate and late rice is still possible, 4 e harvest of coarse grains is unlikely to match the good crop 1973. In ac:iition to weather problems, growth in -ra_:: output t `s year has been limited by holding the gro:;t'.h in fertilize:: to only ? o, compared with 16% in T e s _ i ler :arrest and expanding needs will push China's i.-:p orts to about 10 million tons in FY 75., .nearly 2 million tons -_ore than last year. The PRC is cutting back corn imports and expa::::ing those of wheat relative to FY 74. Wheat: Total i.,,!-eat imports probably will amount to about 9.0 million tons, of which 8.1 million tons have already been co :ntractej. The contracts show 2.8 million tons from the US, 3 Million tcrs frcm. Canada, 2 million tons from Australia, 0.21 :million tc. s frcm the EC and 0.25 million tons from Argentina. :Additicna1 purchases are expected. Corn: About 750,000 tons of corn will be imported, of t;hich a cu 500,000 tcr.s are already contracted -- 420,000 tons _`rc:;: Argentina and 80,000 tons from the US (carryover frcr :-Y 74). China is not expected to buy more US corn because of dissatisfactica with cuality and a deliberate policy of Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 PRC Grain Imports (in Thousand Tons) Wheat Corn Total FY 74 FY 75 FY 74 FY 75 FY 74 FY 75 United States 3,108 3,000 1,734 80 4,842 3,080 Canada 1,608 3,000 0 0 1,608 3,000 Australia 1, 21?6 2,000 0 0 1, 21.6 2, 000 Argentina 0 500 342 670 342 1,170 Unknown 0 _500 0 0 0 500 TOTAL 5,932 9,000 2,076 750 8,008 9,750 Philippines" Projected imports of wheat for the Philippines are about 630,000 tons for FY 75~ up from 524,000 DIT in FY 74 when foreign purchases were held down by high costs and domestic pricing problems. Three-fourths of this year's imports will come from the US and the major part of the remainder will come from Canada. Corn production will be up slightly this year, but corn imports are expected to increase by 10,000 tons to at least 1.00, 000 tons in FY 75. Imports from the US will be about 80,000 tons. The Philippines has asked for 50,000 - 60,000 tons through the PL--480 program and intends to get the balance through commercial transactions. If aid is not forthcoming, the full 80,000 tons probably will be purchased. Imported corn, which is used by commercial feed millers, re:.easc domestic white corn for hhuniar. consur:mlption. Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 ;,,.. Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 25X1 Saudi Arabia Improvements in rural living standards which will trigger a shift in diets from millet and sorghum to wheat and rice account for the estimated increase in total wheat imports of 600,000 metric tons in FY 75 from'475,000 tons in FY 74. With expanding US-Saudi relations, wheat imports- from the US during FY 75 can be expected to increase to about 400,000 tons from an estimated 250,000 tons in FY 74. Corn: Saudi Arabia's corn imports reached at 31,744 tons in 1965 but remained below that level in 1966-73. New facilities to prepare poultry feed from imported corn will push corn import needs to around 30,000 tons in FY 75 With about 10,000 tons expected from the US. South Korea Wheat: In FY 74, South Korea i.;.ported an estimated 1.6 million tons of Wheat and 25,000 tons of wheat flour, all from the United States. Domestic production from the June-July 1974 harvest is down 8L to 150,000 i?!T and consuinp;:jGn has been increasing. It is tentatively estimated that FY 75 wheat importswill reach 1.7 million tons in FY 75. It is difficult to esti.mate requirements during the last half of FY 75 until more is known about what the relationship of rice vs wheat flour will he at the retail lewd.. Recc:iI Approved For Release 2008/11/06: CIA-RDP85T00875RO01900030103-1 ti ..t r, r ., ri.' ;;.i r T(lt r> f r ?,} r~ r x ~1~41"1+~ Tk?ITT" Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 Approved For Release 2008/11/06: CIA-RDP85T00875R001900030103-1 price changes tend to favor consumption of wheat over rice to zeverse a trend. Corn: In FY 74, South' Korea imported .about 465,000 MT of corn including 420,000 MT from the US and nearly 45,000 MT from Thailand. In FY 75, requirements for feed corn are likely to reach 520,000 MT, while those for non-feed purposes should total about 140,000 MT. Production of corn this Septe.-nber-October is likely to total at least' 60,000 I-IT the same as last year. Since no change in stocks is indicated PY 75 corn imports are estimated at 600,000 IT. Thailand will provide some 100,000 1;T, with the remainder being sought almost entirely from the US. Rice: Rice imports in FY 74 amounted to 155,000 tons. Last year's October-November crop totaled a record 4.2] :.:illic:l tons, but this year's harvest is 1i}:ely to be lower due to unfavorable weather, insufficient. fertilizer, and insect damage. Gover:r:r?ent-owned rice stocks are low, and in June Seoul purchased 200,000 tons of US rice on a commercial basis for delivery in FY 75. Additional imports probably will be needed later in the fiscal year, but the amount is uncertain. In i?: