TRANSMITTAL OF CIA ANALYSIS OF WORLD SUPPLY AND DEMAND FOR GRAIN 1974/75

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001900030103-1
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 65
• Document Creation Date: December 21, 2016
• Document Release Date: November 6, 2008
• Sequence Number: 103
• Publication Date: September 24, 1974
• Content Type: MF

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Supply and ~^: aand or Grain, 1974/75
1. In response to a request by your o2i: i.cc~. on
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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
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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
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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
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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.
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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.
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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
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 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.
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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
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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.
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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:
?1:mpor.te.rs, 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.
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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
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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
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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.
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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.
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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
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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].ant.ing
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 ma-.ly 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
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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 -.
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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
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Table 4
Estimated Demand fat U.S. Corn Exports 1974/75?/
(In Thousand Metric Tons)
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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
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 hi v
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APPENDIX - A
Situations in Selected Countries
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 Importing Countries
Western I'e.nisphe.re
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
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? Major Exporting Countries
Argentina
Australia
Canada
South Africa
Thailand
Western Europe and the EC
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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.
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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.
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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,
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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
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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
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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 ai%..an are about 300,000 tons and to PRC
350,000 tons :?;i th the small balance going to other Asian nation.,;.
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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,
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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
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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.
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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.
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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 for.delivery during the last
half of this calendar year.
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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
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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
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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.
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Venezuela
Little wheat is grown in Venezuela. Because of low
stocks, wheat imports in FY 75 should be around 650,000
tons compared.to 570,000 tons.in 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
 ,.,.,........... ...
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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.
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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
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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
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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
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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.
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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.
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? 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.
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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
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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
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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
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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.
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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
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 ti ..t r, r ., ri.' ;;.i r T(lt r> f r ?,} r~ r x ~1~41"1+~ Tk?ITT"
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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?: