FAPRI - Iowa State University

FAPRI 26 World Agricultural Outlook FAPRI - Iowa State University John Beghin, FAPRI Director Fengxia Dong, International Dairy Analyst Amani Elobeid, International Sugar Analyst Jay Fabiosa, Technical Director and International Livestock Analyst Frank Fuller, International Market Analyst Chad Hart, U.S. Policy and Insurance Analyst Karen Kovarik, System Support Specialist Simla Tokgoz, International Grains Analyst Tun-Hsiang (Edward) Yu, International Oilseeds Analyst Seth Meyer, Cotton and Textile Fiber Analyst (University of Missouri) Eric Wailes & Ed Chavez, International Rice Consultants (University of Arkansas) CENTER FOR AGRICULTURAL AND RURAL DEVELOPMENT IOWA STATE UNIVERSITY AMES, IOWA 511-17 TELEPHONE: 515.294.1183 http://www.fapri.iastate.edu

FAPRI 26 World Agricultural Outlook Table of Contents World Agricultural Outlook, Briefing Book 5 Major Factors Affecting World Agriculture 6 Wheat Outlook 1 Rice Outlook 16 Coarse Grains Outlook 2 Oilseeds Outlook 28 Cotton Outlook 4 Sugar Outlook 42 Ethanol Outlook 47 Livestock and Poultry Outlook 48 Dairy Outlook 62 Country-specific baseline tables may be obtained at http://www.fapri.iastate.edu/

FAPRI 26 World Agricultural Outlook Abbreviations and Acronyms AI AWB BSE CAP CIF CIS CMO cwt EU EU-15 EU NMS FMD FOB GDP ha kg mha mmt mt NAFTA NFD ROW SPS tmt TRQ WMP WTO avian influenza Australian Wheat Board bovine spongiform encephalopathy Common Agricultural Policy cost, insurance, and freight Commonwealth of Independent States Common Market Organization hundredweight European Union (Enlarged) European Union (original 15 member countries) European Union New Member States (1 new members) foot-and-mouth disease free on board gross domestic product hectare kilogram million hectares million metric tons metric ton North American Free Trade Agreement nonfat dry milk Rest of World sanitary and phytosanitary thousand metric tons tariff rate quota whole milk powder World Trade Organization page 3

World Agricultural Outlook Briefing Book 26 Charts, Highlights, and Tables

FAPRI 26 World Agricultural Outlook Macroeconomic Factors Affecting World Agriculture NAFTA Real GDP Growth Rates Percent 8 6 4 2-2 -4-6 NAFTA economies continued to grow at a solid pace in 25, with growth of 2.9% for Canada, 3.1% for Mexico, and 3.7% for the United States. This growth path is projected to continue in the coming decade for the three countries, with average annual growth rates of 2.6%, 4%, and 3%, respectively. Price inflation is expected to remain moderate during the outlook period. -8 1995 1997 1999 21 23 25 27 29 211 213 215 U.S. Mexico Canada Asian Real GDP Growth Rates Percent 12 1 8 6 4 2-2 -4-6 -8 1995 1997 1999 21 23 25 27 29 211 213 215 The outlook for the Asian economies remains solid, with a projected average annual real growth rate of 3.7%, and with high growth rates (5% to 7.4%) predicted for China, Vietnam, Thailand, and India for the decade. East Asia is growing strongly. Japan s outlook remains positive; its economy grew by 2.4% in 25 and is projected to grow by 1.7% annually for the outlook period. Inflation remains low in most of Asia. Japan South Korea China Taiwan Latin American Real GDP Growth Rates Percent 1 5-5 -1-15 1995 1997 1999 21 23 25 27 29 211 213 215 Argentina s GDP grew by 8.7% in 25 and is expected to grow at around 4% annually until 214. Brazil s economy grew more moderately (2.7%) in 25; it picks up during the coming decade at about 3.7% per year. The Latin America region grows at a 3.9% average annual rate during the outlook period. Price inflation is expected to be moderate in most of Latin America, except in Venezuela. Latin America Brazil Argentina page 6

FAPRI 26 World Agricultural Outlook EU-15 Real GDP Growth, Enlargement, and CAP Reform Percent 16 14 12 1 8 6 4 2 Macroeconomic Factors Affecting World Agriculture -2 1995 1997 1999 21 23 25 27 29 211 213 215 EU-15 Poland Czech Rep. Hungary The economic growth convergence between old Europe and NMS continued in 25, with the former growing 1.5% and the latter 4.1%. This catching up will continue during the next decade, with NMS growing more than twice as fast as the EU-15 (4.2% versus 1.9% per year). Most members of the EU-25 experience a moderate currency appreciation against the U.S. dollar in the coming decade, reducing their competitiveness. Exchange Rate Projections Real per U.S.$ 4. 3.5 3. 2.5 2. 1.5 1..5 Peso per U.S.$ 5. 4.5 4. 3.5 3. 2.5 2. 1.5 1..5 Most Latin American currencies appreciated against the dollar in 25 and do so again in 26. After that, most of these currencies, including the Brazilian real, depreciate in nominal and real terms. The Argentine peso is the notable exception; it depreciates nominally but appreciates in real terms over the whole decade because price inflation is significantly higher than in the U.S... 1995 1997 1999 21 23 25 27 29 211 213 215 Brazil Argentina Exchange Rate Projections AU$ per U.S.$ NZ$ per U.S.$ 2.5 2.5 2. 2. 1.5 1.5 1. 1..5.5.. 1995 1997 1999 21 23 25 27 29 211 213 215 Australia New Zealand The U.S. dollar remained weak relative to the currencies of Australia, Canada, and New Zealand in 25. In 26, this weakness expands to the currencies of Japan and the EU-25. Most Asian currencies appreciate in real terms against the U.S. dollar, especially those of China, Indonesia, Taiwan, and Thailand. Large appreciations also occur elsewhere, with the cost of a U.S. dollar in real terms falling by 4.5% per year in Russia and by 6.1% per year in Ukraine. page 7

FAPRI 26 World Agricultural Outlook Macroeconomic Growth Projections Real GDP GDP Deflator Exchange Rate* 25 21 215 25 21 215 25 21 215 (Annual Growth Rate in Percent) World 3.3 3.1 3. Developed Market Economies Australia 2.4 2.5 2.4 5.3 3.6 3.1-4.3 -.4. Canada 2.9 2.9 2.3 2.9 1.7 1.8-5.9. -.4 European Union-15 1.5 2. 1.8.1 1.9 1.9-1.7 3.2-1.4 Japan 2.4 1.8 1.5-1.1 1.6 2.1 -.3-2.4 -.1 New Zealand 2.1 2.5 2.1 2.6 2.1 2.1-6.3.. Switzerland 1.8 1.5 1.5 1.1 1.4 1.3-1.4 3.9-2. United States 3.7 2.8 3.2 2.7 2.1 2.4 Developing Market Economies Africa 4.7 4.9 4.5 Algeria 6.4 6. 4.6 8. 3.8 2.8 1.5.6 2.1 Egypt 4.9 5.3 4.3 2.1 2.4 3.3-6.6 1.4 2.9 Nigeria 4.5 4.7 4.8 13.1 8.9 8.9 -.7 4.5 4.5 South Africa 4.4 4.6 4.7 5.1 4.1 4.8-2.5 3.3 2.2 Tunisia 5. 6.1 5.7 2.2 3.4 2.2 2.2 2.5.4 Asia 4.2 3.8 3.4 China 9.3 7.5 6.5 2.7 3.1 3.3 -.5-1.8 -.5 Hong Kong 7.3 5.3 4. -.6 1.6 1.8. -.1 -.3 India 7.2 5.8 5.3 4.8 3.4 3.6-3.6.7.6 Indonesia 5.5 4.8 4.5 12.1 3.9 4.3 7.5.6 1.1 Malaysia 5.3 4.8 5. 4.9 2.5 2.7 -.2 -.9 -.2 Pakistan 8.4 4.1 3.5 6.3 5.3 5.2 2. 2.8 2.1 Philippines 4.5 4.2 4. 4.2 3. 2.9-1.4.5.2 South Korea 4. 5.2 3.5 -.3 2.9 2.5-1.9.7.6 Taiwan 3.7 4.9 3.7 -.9 1.9 2.2-3.6-1.5-1.4 Thailand 4.2 5.3 5.2 4.8 2.7 3. -.6-2.8 -.8 Vietnam 8.1 6.8 6.4 7.6 2.9 2.5.5.2. CIS 6.6 4.8 4.1 Russia 6.1 4.2 3.6 15.4 5.9 4.6-2.3 -.6-2.1 Ukraine 3.3 4.6 4.3 14.8 6.2 5.5-3.2-2. -.5 EU New Member States 4.1 4.5 3.4 9.3 2.4 2.2 Czech Republic 4.8 4.2 3.8 1.4 2.2 1.7-7.7 3.2-1.4 Estonia 8.9 5.5 4.3 3.7 2.4 2.4-1.6 3.2-1.4 Hungary 4. 3.7 2.9 3.5 2.4 2.3-3.6 3.2-1.4 Latvia 9.8 4.8 4.2 7.1 2.1 2. 2.9 3.2-1.4 Lithuania 7. 5.2 4.6 5. 2.5 1.8-1.8 3.2-1.4 Poland 3.3 4.9 3.2 2.1 2.4 2.3-12.1 3.2-1.4 Slovakia 5.3 4.5 3.8 2.8 2.4 2. -5.2 3.2-1.4 Slovenia 4. 3.8 3.7 2.5 2.7 2.4-1.4 3.2-1.4 Latin America 4.4 4. 3.7 Argentina 8.7 3.9 3.8 17.1 7.9 7.6-1.3 3.8 4.3 Brazil 2.7 3.8 3.4 7.6 6.1 5.7-14.5 6.2 3.7 Colombia 4.3 3.8 3.7 5.8 4.5 4.2-11.2 5.2 2.7 Mexico 3.1 4.2 4.2 5.5 4.9 4.7-2.9 2.5 2.4 Uruguay 6.4 3.8 3.5 7.2 4.5 4.5-13.7 2.6 2.3 Venezuela 9.3 3.9 3.5 18.9 15.1 9.1 9.5 14.7 9.8 Middle East 5.8 4.1 3.8 Iran 5.6 4.4 4.1 17.9 9.2 8.1 3.7 3. 7. Israel 4.9 3.7 3.2 -.3 2.3 3.2-1. 1.7 1.4 Saudi Arabia 5.9 4.2 4. 6.7 1.7 1.7 -.1.. Other Eastern Europe 4.7 4.9 3.9 Bulgaria 5.6 3.9 3.3 7.9 2.7 2.3-1.6 3.2-1.4 Source: International Financial Statistics January 26 and projections after 25 are from Global Insight (formerly DRI-WEFA). * Local currency per U.S. dollar. page 8

FAPRI 26 World Agricultural Outlook World Crop Trade and U.S. Value Share Billion dollars 14 12 1 8 6 4 2 Percent 3 25 2 15 1 5 The value of world crop trade is projected to grow 3.5% annually on average, adding $34.7 billion over the next 1 years. Shares of corn, barley, and palm complex commodities in the total value of exports increase at the expense of other commodities. Although the value of U.S. exports increases from $14.9 billion in 25/6 to $18.7 billion in 215/16, the U.S. value share decreases from 17.6% in 25/6 to 15.6% in 215/16. 1999/ 21/2 23/4 25/6 27/8 29/1 211/12 213/14 215/16 U.S. Other Exporters U.S. Value Share Crops include wheat, rice, corn, sorghum, barley, soybean, rapeseed, peanuts, and sunflower. World Meat Trade and U.S. Market Share Million mt Percent 25 35 3 2 25 15 2 1 15 1 5 5 1999 21 23 25 27 29 211 213 215 U.S. Other Exporters U.S. Market Share (percent) The U.S. share of total meat trade dipped to a low of 19.6% in 24 from a five-year high average of 27%, when beef exports dropped by 81.7% after major export destinations closed their borders following the confirmed BSE case in the U.S. in 24. However, quick measures taken to restore consumer confidence in the safety of U.S. beef reopened these markets beginning in 25. Continued strong growth in pork and poultry exports, coupled with the reopening of beef markets, enables the U.S. to regain its trade share. The U.S. trade share reaches 24% in 215. page 9

FAPRI 26 World Agricultural Outlook Wheat Outlook World Wheat Stocks-to-Use Ratio vs. Price Dollars per mt 25 2 15 1 5 Percent 4 35 3 25 2 15 1 5 Lower production and higher consumption increased the world wheat price to $16.9 per mt in 25/6. The price is projected to decrease to $157.5 per mt in 26/7 as an increase in production expands the world supply. The average annual growth rate of the wheat price is 1% in the next 1 years. The stocks-to-use ratio was slightly lower at 24.2% in 25/6, and it is projected to increase to 24.4% in 26/7. 1995/96 1999/ 23/4 27/8 211/12 215/16 U.S. FOB Gulf Price Stocks-to-Use Ratio World Wheat Area, Production, and Consumption Thousand ha 8, 235, 7, 23, 6, 225, 5, 22, 4, 215, 3, 21, Wheat area is projected to increase by 2.2 mha in 26/7 to reach 219.4 mha. It stays fairly stable after that. The main sources of this increase are the recoveries in Australian and Argentine wheat area. Aided mostly by yield growth, production is projected to increase to 624.8 mmt in 26/7 and to 672 mmt in 215/16. 2, 1, 25, 2, 195, 1995/96 1999/ 23/4 27/8 211/12 215/16 Production Consumption Area World Wheat Feed, Food Use, and Per Capita Consumption 8, 7, 6, 5, 4, 3, 2, 1, kg per person 74 1995/96 1999/ 23/4 27/8 211/12 215/16 84 83 82 81 8 79 78 77 76 75 Per capita consumption of wheat continues its downward trend. Thus, the increase in world demand comes from population growth. Consumption grows.8% annually on average, reaching 671 mmt in 215/16. Food use reaches 557.2 mmt in 215/16, with the main source of the demand increase coming from Asian, Middle Eastern, and African countries. World feed use reaches 113.8 mmt in 215/16. Feed Use Food Use Per Capita Consumption page 1

FAPRI 26 World Agricultural Outlook Major Wheat Exporters World Wheat Net Trade and U.S. Market Share 12, 1, 8, 6, 4, 2, Percent 45 1995/96 1999/ 23/4 27/8 211/12 215/16 Net Trade U.S. Market Share 4 35 3 25 2 15 1 5 World wheat net trade increases to 93 mmt in 26/7 because of lower prices and higher food use. It grows 1.8% annually on average, reaching 15.7 mmt in 215/16. The main source of the demand increase is from Asian, Middle Eastern, and African countries that have limited potential to increase production. U.S. market share decreases as competing suppliers increase their market shares. In 25/6, the U.S. supplied 28.2% of world net trade; by 215/16 this ratio drops to 24.8%. Wheat Production by Major Competitors 2, 18, 16, 14, 12, 1, 8, 6, 4, 2, 1995/96 1999/ 23/4 27/8 211/12 215/16 Wheat production was lower in the EU-15 in 25/6 because of lower area and a return to average yield levels. As wheat area is fairly stable over the projection period, most of the production increase will come from yield growth in the EU-15. Growth in both area and yields increases Argentine production to 18.6 mmt in 215/16. Recovery in area increases Australian production to 25.3 mmt in 26/7 and to 27.8 mmt in 215/16. EU-15 Argentina Australia Canada World Wheat Market Shares Percent 25 2 15 1 5 1995/96 1999/ 23/4 27/8 211/12 215/16 EU-15 Argentina Australia Canada The EU-15 increased its market share in 25/6 and is projected to keep its share at approximately the same level over the next 1 years. Argentina is projected to recover its market share in 26/7 with the recovery in production. Canada s market share decreases over the next 1 years as production growth does not keep up with domestic consumption growth. Australian market share increased in 25/6 and it is projected to be stable at that level over the projection period. page 11

FAPRI 26 World Agricultural Outlook Major Wheat Exporters EU-15 Wheat Supply and Utilization 12, 2, 18, 1, 16, 8, 14, 12, 6, 1, 8, 4, 6, 2, 4, 2, 1995/96 1999/ 23/4 27/8 211/12 215/16 In 25/6, production decreased with the return to an average yield level and the decline in area. In 26/7, production increases to 11 mmt because of yield growth. Area increases only slightly over the next 1 years, so most of the production increase comes from yield growth. Food use grows.25% annually on average, reaching 51.7 mmt in 215/16, while feed use reaches 47.9 mmt. Net exports reach only 8.3 mmt in 215/16, hindered by the strong euro. Production Consumption Net Exports Argentine Wheat Supply and Utilization 2, 18, 16, 14, 12, 1, 8, 6, 4, 2, 14, 12, 1, 8, 6, 4, 2, In Argentina, area and yield are projected to recover, increasing production to 15.2 mmt in 26/7 and to 18.6 mmt in 215/16. Consumption grows.9% on average annually, reaching 5.7 mmt in 215/16. Aided by the devaluation of the peso, production growth, and a meager consumption increase, Argentine net exports reach 12.9 mmt in 215/16. 1995/96 1999/ 23/4 27/8 211/12 215/16 Production Consumption Net Exports Canadian Wheat Supply and Utilization 35, 3, 25, 2, 15, 1, 5, 25, 2, 15, 1, 5, Since wheat area declines over the next 1 years, the production increase comes from yield growth. Production reaches 26.9 mmt in 215/16, while consumption reaches 11.2 mmt, primarily driven by growth in feed use. Net exports increase to 16.6 mmt in 26/7, as higher beginning stocks increase the supply. Net exports decrease to 15.7 mmt by 215/16, as production growth cannot keep up with consumption growth. 1995/96 1999/ 23/4 27/8 211/12 215/16 Production Consumption Net Exports page 12

FAPRI 26 World Agricultural Outlook Major Wheat Importers Wheat Net Imports by Major Regions 9, 8, 7, 6, 5, 4, 3, 2, 1, Net imports of Asian countries increase by 3.2 mmt over the next decade, owing to an increase in food use that comes from population growth. Trade liberalization has increased imports in the past and continues to do so. Middle Eastern and African countries increase their net imports by 6.6 mmt over the next 1 years. Latin American countries net imports decrease to 9.7 mmt in 215/16. 1995/96 1999/ 23/4 27/8 211/12 215/16 Asia Latin America Middle East and Africa Asian Wheat Net Imports 35, 3, 25, 2, 15, 1, Asian countries wheat net imports grow 1.1% annually on average, reaching 3.7 mmt in 215/16 as consumption increases more than production. Japan s net imports reach 5.3 mmt in 215/16, while Pakistan s reach 1.2 mmt. India becomes a net exporter again in 26/7. 5, -5, -1, 1995/96 1999/ 23/4 27/8 211/12 215/16 Other Asia China India Japan Pakistan Chinese Wheat Net Imports 14, 12, 1, 8, 6, 4, 2, In 25/6, China s wheat net imports decreased dramatically, to 1 mmt, because of the increase in production. The persistent decline in available stocks has decreased the supply of wheat. Thus, despite the increase in production and decreasing per capita consumption, China is projected to remain a wheat net importer over the next 1 years. Net imports reach 2.1 mmt in 215/16. -2, 1995/96 1999/ 23/4 27/8 211/12 215/16 page 13

FAPRI 26 World Agricultural Outlook Major Wheat Importers Latin American Wheat Net Imports 25, 2, 15, 1, Mexican wheat net imports continue their increasing trend, reaching 4.2 mmt in 215/16. Rising per capita consumption combined with population growth is the main source of this demand increase. Other Latin American countries net imports reach 9 mmt in 26/7 and 1.4 mmt in 215/16 because of the increase in food use. 5, 1995/96 1999/ 23/4 27/8 211/12 215/16 Other Latin America Brazil Mexico Brazilian Wheat Supply and Utilization 14, 9, 12, 8, 7, 1, 6, 8, 5, 6, 4, 3, 4, 2, 2, 1, 1995/96 1999/ 23/4 27/8 211/12 215/16 Wheat production in Brazil has increased in the past few years, mainly because of an increase in area. Area is projected to be slightly lower in the next decade, lowering production. Consumption grows 1.4% on average annually, reaching 12.4 mmt in 215/16 because of population growth and a per capita consumption increase. Combined with the consumption growth, the decline in production increases Brazil s wheat net imports to 7.9 mmt in 215/16. Production Consumption Net Imports African and Middle Eastern Wheat Net Imports 5, 45, 4, 35, 3, 25, 2, 15, 1, 5, Population growth drives the consumption increase in African and Middle Eastern countries, as their per capita consumption is projected to continue its downward trend. African and Middle Eastern countries wheat net imports reach 38.8 mmt in 26/7 and 44.3 mmt in 215/16. Egypt s net imports reach 8.2 mmt in 215/16 with the increase in food use. Iran becomes a net exporter, though a small one. Algerian net imports reach 6.9 mmt in 215/16. -5, 1995/96 1999/ 23/4 27/8 211/12 215/16 Other Africa and Middle East Algeria Tunisia Morocco Egypt Iran page 14

FAPRI 26 World Agricultural Outlook Wheat Trade 5/6 6/7 7/8 8/9 9/1 1/11 11/12 12/13 13/14 14/15 15/16 Net Exporters (Thousand Metric Tons) Argentina 6,99 9,969 1,985 11,376 11,55 11,794 12,2 12,232 12,457 12,681 12,97 Australia 16,425 18,22 18,215 18,41 18,674 18,888 19,118 19,317 19,5 19,667 19,826 Canada 16,25 16,596 16,516 16,514 16,4 16,266 16,14 16,2 15,918 15,811 15,687 EU New Member States 1,28 2,844 2,336 2,64 1,543 1,43 1,421 1,373 1,35 1,34 1,33 European Union-15 6,99 7,454 7,448 7,31 7,512 7,835 8,9 8,15 8,247 8,297 8,362 Other CIS 845 1,87 1,577 2,9 2,43 2,82 3,32 3,735 4,17 4,65 5,51 Russia 9, 7,936 7,957 8,538 8,828 8,832 8,742 8,735 8,783 8,847 8,856 Ukraine 5,45 5,692 5,236 5,224 5,289 5,365 5,455 5,552 5,659 5,755 5,853 United States 24,93 23,51 23,82 23,868 24,353 24,474 24,83 25,78 25,472 25,856 26,199 Total Net Exports * 88,158 93,35 94,87 96,299 97,565 99,27 1,489 11,74 13,71 14,418 15,733 Net Importers Algeria 5,5 5,993 6,14 6,216 6,37 6,426 6,497 6,589 6,684 6,778 6,878 Brazil 5,5 6,61 6,941 7,11 7,213 7,35 7,421 7,555 7,694 7,833 7,977 China 1, 3,141 3,124 2,867 2,765 2,687 2,676 2,559 2,451 2,327 2,165 Egypt 7,49 7,255 7,341 7,4 7,51 7,627 7,766 7,884 8,1 8,114 8,224 India 5-329 -647-93 -91-1,259-1,471-1,46-1,415-1,422-1,515 Iran 15-55 -69-82 -84-63 -64-7 -11-137 -175 Japan 5,25 5,244 5,322 5,382 5,383 5,39 5,388 5,382 5,375 5,364 5,355 Mexico 3,1 3,269 3,411 3,499 3,583 3,674 3,771 3,868 3,972 4,82 4,194 Morocco 2,8 2,619 2,443 2,41 2,362 2,368 2,427 2,469 2,517 2,561 2,612 Other Africa/Middle East 2,735 21,947 22,428 22,99 23,44 23,789 24,157 24,382 24,71 25,89 25,478 Other Asia 15,14 15,346 15,457 15,77 16,18 16,375 16,668 16,957 17,256 17,54 17,87 Other Eastern Europe -25 391 481 56 499 485 471 454 447 428 414 Other Latin America 8,9 9,69 9,38 9,525 9,686 9,839 9,965 1,85 1,27 1,321 1,433 Pakistan 75 374 491 554 651 746 833 937 1,43 1,156 1,268 South Korea 3,775 3,938 4,35 4,111 4,167 4,216 4,27 4,324 4,37 4,41 4,42 Taiwan 1,8 1,18 1,126 1,134 1,142 1,155 1,169 1,182 1,195 1,27 1,219 Tunisia 1,1 1,88 1,125 1,16 1,167 1,182 1,27 1,238 1,271 1,3 1,329 Rest of World 1,625 1,881 1,97 1,963 1,955 2,2 2,39 2,76 2,116 2,155 2,198 Residual 3,763 3,763 3,763 3,763 3,763 3,763 3,763 3,763 3,763 3,763 3,763 Total Net Imports 88,158 93,35 94,87 96,299 97,565 99,27 1,489 11,74 13,71 14,418 15,733 Wheat Prices (U.S. Dollars per Metric Ton) U.S. FOB Gulf 16.91 157.48 161.51 163.89 168.39 17.89 173.32 174.72 176. 177.3 178.24 Canadian Wheat Board 156.46 155.1 158.47 16.23 163.88 166.7 168.25 169.52 17.65 171.81 172.71 AWB Limited Export Quote 182.95 177.94 179.73 18.11 182.39 182.8 183.9 182.42 181.6 18.79 179.64 European Union Market 137.9 136.51 148.81 16.51 154.69 149.37 148.5 149.26 15.5 151.6 151.52 * Total net exports are the sum of all positive net exports and negative net imports. Countries included: Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Uzbekistan. Countries included: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Macedonia, Romania, Serbia, Montenegro. page 15

World Rice Stocks-to-Use Ratio vs. Price Dollars per mt 4 35 3 25 2 15 1 5 FAPRI 26 World Agricultural Outlook Rice Outlook Percent 1995/96 1999/ 23/4 27/8 211/12 215/16 45 4 35 3 25 2 15 1 5 Tight exportable supplies across Asia and record low world rice stocks have resulted in sharply higher Thai export prices in 24 and 25. Driven by consumption and trade, the export price continues to trend upward over the baseline period, reaching $334 per mt by 215. Strong consumption demand, coupled with stocks liquidation by China and India, keeps the stocks-to-use ratio near 17% over the baseline. FOB Bangkok 1% B Grade Stocks-to-Use Ratio World Rice Area and Milled Yield Million ha mt per ha 156 154 3. 2.9 152 2.8 15 2.7 148 2.6 146 2.5 144 2.4 142 2.3 14 2.2 1995/96 1999/ 23/4 27/8 211/12 215/16 World rice area in 25 grew by 1.5% over the 24 level. Area recoveries in India, Thailand, and Myanmar and an increase in China are partly offset by an area decline in Brazil. Continued higher prices in 25 are expected to increase global rice area in 26 by just under 1%. Over the next decade, world rice area gains marginally. Milled yields trend higher, from 2.7 mt per ha in 25 to 3 mt per ha by 215. Area Yield 5 45 4 35 3 25 2 15 1 World Rice Production, Use, and Per Capita Consumption Million mt 5 kg per person 59 1995/96 1999/ 23/4 27/8 211/12 215/16 68 67 66 65 64 63 62 61 6 The gap between world rice production and consumption continued in 25 for the fifth consecutive year. Higher production is expected to close the supply deficit in 26 and return to positive levels over the rest of the baseline period. World per capita consumption of rice is expected to continue to decline, driven by urbanization, income growth, aging populations, and diet diversification in a number of Asian countries. Production Use Per Capita Consumption page 16

FAPRI 26 World Agricultural Outlook Rice Outlook World Rice Trade 4, 35, 3, 25, 2, 15, 1, World rice trade is expected to increase by an average 1.7% annual rate from 25 through 215. By 215, global rice trade is projected to reach 34.3 million tons, nearly 2% higher than the record set in 22. Despite the growth, rice trade as a share of world rice consumption is only 7.6% by 215 and remains small relative to other grains. 5, 1995/96 1999/ 23/4 27/8 211/12 215/16 Rice Exports by Top Five Exporting Countries 3, 25, 2, 15, 1, 5, 1995/96 1999/ 23/4 27/8 211/12 215/16 India Pakistan Thailand U.S. Vietnam Rice Exports by Other Major Exporting Countries 6, 5, 4, 3, 2, 1, 1995/96 1999/ 23/4 27/8 211/12 215/16 Argentina Australia China Egypt Myanmar Uruguay Thailand, Vietnam, and India account for virtually all growth in world rice exports over the next decade. All three countries experience declines in per capita consumption, which allows yield-based growth in production to outpace that of consumption over the intermediate run. Rice exports from the U.S. are expected to decline, as area contracts and growth in domestic consumption outpaces growth in output that comes from slight yield gains. Pakistan s exports decline over the next 1 years, as consumption grows and output stagnates. Exports from China have declined in recent years because of reduced stocks and less exportable supplies. However, shipments are expected to grow steadily to just below 1 million tons over the next decade as per capita consumption declines. Uruguay, Myanmar, and Australia are also expected to expand exports following their recovery from recent declines. Egyptian exports are projected to slow over the baseline period, as domestic demand expands faster than production. page 17

FAPRI 26 World Agricultural Outlook Rice Outlook African and Middle Eastern Rice Imports 9, 8, 7, 6, 5, 4, 3, 2, 1, 1995/96 1999/ 23/4 27/8 211/12 215/16 Rising import demand in Africa and the Middle East accounts for nearly 26% of the total growth in world rice imports over the next decade. Nigeria is expected to import over 2 million tons by 215, as consumption continues to outstrip production. Because rice production in the Middle East is constrained by water availability, rice imports in Iran, Iraq, Saudi Arabia, and Ivory Coast continue to expand along with population and per capita consumption. Ivory Coast Nigeria S. Africa Iran Iraq S. Arabia Asian Rice Net Imports 1, 9, 8, 7, 6, 5, 4, 3, 2, 1, 1995/96 1999/ 23/4 27/8 211/12 215/16 Bangladesh Indonesia Malaysia Philippines Japan Despite declining per capita consumption in Indonesia and Bangladesh, population growth in these two countries causes rice consumption to outpace gains in production. The two countries combined imports account for nearly 27% of the total growth in world rice imports over the projection period. Despite self-sufficiency efforts, the Philippines is expected to remain an important rice importer over the same period. Malaysia s imports increase gradually to just under 1 million tons by 215. Japan s imports, on the other hand, remain flat without further market access expansion under the WTO. Other Rice Net Imports 3,5 3, 2,5 2, 1,5 1, 5 1995/96 1999/ 23/4 27/8 211/12 215/16 Brazil European Union Mexico Turkey Yield growth and a moderate decline in per capita consumption cause Brazilian imports to decline over the baseline period. CAP reforms in the EU result in lower production and an increase in imports of rice. With competition from cash crops dampening growth in rice area and continued growth in per capita consumption in Mexico, rice imports will expand to over 8 tmt by 215. Driven by population growth and rising incomes, rice imports in Turkey continue to increase, exceeding 4 tmt by 215. page 18

FAPRI 26 World Agricultural Outlook Rice Trade 5/6 6/7 7/8 8/9 9/1 1/11 11/12 12/13 13/14 14/15 15/16 Net Exporters (Thousand Metric Tons) Argentina 35 399 48 424 48 41 424 443 465 487 51 Australia 344 4 472 483 5 514 537 538 544 548 555 China 99 144 179 164 21 224 231 247 251 264 276 Egypt 97 915 834 82 812 817 819 83 84 858 856 India 3,499 4,587 4,754 5,144 5,22 5,143 5,89 5,65 5,12 4,939 4,868 Myanmar (Burma) 151 214 229 242 259 279 3 321 342 363 386 Pakistan 2,828 2,276 2,388 2,374 2,412 2,319 2,332 2,324 2,39 2,293 2,269 Thailand 7,8 8,456 8,489 8,971 9,167 9,366 9,54 9,72 9,95 1,83 1,249 United States 3,429 2,811 2,959 2,961 2,958 2,999 2,991 2,969 2,934 2,946 3,92 Uruguay 624 797 761 766 769 779 794 89 831 854 875 Vietnam 4,43 4,12 4,263 4,441 4,78 4,991 5,262 5,526 5,786 6,37 6,284 Total Net Exports * 23,76 25,11 25,737 26,772 27,415 27,842 28,319 28,792 29,219 29,671 3,221 Net Importers Bangladesh 651 1,131 1,17 1,35 1,139 1,131 1,118 1,13 1,176 1,257 1,374 Brazil 568 89 879 861 784 675 572 465 356 264 184 Canada 251 267 272 277 279 283 287 291 295 299 33 European Union 8 82 927 968 923 894 886 894 878 872 87 China - Hong Kong 315 299 299 299 296 294 293 292 29 289 288 Indonesia 787 747 1, 1,229 1,443 1,585 1,699 1,769 1,88 1,79 1,798 Iran 95 1,112 1,229 1,344 1,371 1,423 1,466 1,471 1,479 1,492 1,514 Iraq 1,21 1,278 1,57 1,114 1,159 1,197 1,233 1,269 1,34 1,34 1,375 Ivory Coast 754 788 819 87 887 93 921 943 967 996 1,26 Japan 5 482 482 482 482 482 482 482 482 482 482 Malaysia 687 684 675 75 774 781 813 848 883 923 966 Mexico 6 76 643 672 692 715 741 764 788 81 834 Nigeria 1,76 1,523 1,617 1,725 1,777 1,824 1,879 1,936 1,976 2,26 2,78 Philippines 1,897 1,34 1,195 1,317 1,356 1,381 1,457 1,61 1,735 1,868 2,6 Saudi Arabia 1,19 1,115 1,193 1,225 1,251 1,277 1,33 1,329 1,354 1,38 1,46 South Africa 79 753 774 786 793 83 818 829 842 856 871 South Korea 275-29 266 287 37 327 348 368 388 49 49 Taiwan 25 127 127 127 127 127 127 127 127 127 127 Turkey 24 299 246 243 37 375 394 381 379 43 441 Rest of World 9,553 1,797 1,93 11,162 11,268 11,364 11,481 11,595 11,71 11,79 11,87 Total Net Imports 23,76 25,11 25,737 26,772 27,415 27,842 28,319 28,792 29,219 29,671 3,221 Prices (U.S. Dollars per Metric Ton) Thai 1% Grade B 293 251 253 248 263 276 286 299 312 324 334 Thai 5% Broken 28 239 241 243 257 27 28 292 35 317 326 U.S. FOB Gulf Ports 359 314 33 38 315 319 319 321 325 327 325 * Total net exports are the sum of all positive net exports and negative net imports. page 19

FAPRI 26 World Agricultural Outlook Coarse Grain Outlook World Coarse Grain Area 25, 2, 15, 1, 5, The world coarse grain area is expected to decrease slightly in 26/7 with reductions in corn and sorghum areas. After that, it increases steadily, reaching 245.7 mha in 215/16. Although all three crops have area increases, corn area increases the most, especially in the U.S. and Latin American countries, where it has a higher rate of return with respect to other crops, including soybeans. 1995/96 1999/ 23/4 27/8 211/12 215/16 Corn Barley Sorghum World Coarse Grain Supply and Utilization 1,2, 14, 1,, 12, 1, 8, 8, 6, 6, 4, 4, 2, 2, 1995/96 1999/ 23/4 27/8 211/12 215/16 World coarse grain production is projected to grow 1.3% annually on average because of both area and yield growth in all three crops. Production reaches 994.4 mmt in 215/16. Consumption grows nearly 1.2% annually on average and matches production at 994.4 mmt in 215/16. Net trade in coarse grains grows 1.5% annually on average and reaches 114.4 mmt in 215/16. Coarse Grain = Corn, Barley, and Sorghum. Production Consumption Net Trade Coarse Grain Production by Major Competitors 16, 14, 12, 1, 8, 6, 4, 2, Among U.S. competitors in the coarse grain markets, Argentina s production grows the fastest, at a 1.6% annual growth rate. Argentine coarse grain production growth is mainly due to corn production growth. The EU-15 s production increases over the next 1 years because of increases in both barley and corn production. 1995/96 1999/ 23/4 27/8 211/12 215/16 EU-15 Argentina Australia Ukraine Coarse Grain = Corn, Barley, and Sorghum. page 2

FAPRI 26 World Agricultural Outlook Coarse Grain Outlook World Coarse Grain Net Trade and U.S. Market Share 14, 12, 1, 8, 6, 4, 2, Percent 8 7 6 5 4 3 2 1 World coarse grain net trade is projected to grow at an average annual rate of 1.5%. Both barley net trade and corn net trade increase because of a demand increase coming mainly from African and Asian countries. The U.S. trade share was 52.4% in 25/6 and it increases to 59.8% in 215/16 as the U.S. captures most of this growing demand. 1995/96 1999/ 23/4 27/8 211/12 215/16 Corn Barley Sorghum U.S. Market Share World Coarse Grain Market Shares Percent 2 15 1 5-5 1995/96 1999/ 23/4 27/8 211/12 215/16 Argentina s market share in the coarse grain market decreased in 25/6 because of a decline in its corn net exports. Its market share will not reach former levels, as corn net exports do not increase as fast as the world demand. The EU-15 expands its market share in 26/7, as barley net exports increase and corn net imports fall. Australia increased its market share in 25/6, owing to higher barley net exports. Coarse Grain = Corn, Barley, and Sorghum. EU-15 Argentina Australia Ukraine Coarse Grain Major Importers 5, 4, 3, 2, 1, -1, China is projected to become a net corn importer in 211/12, with levels reaching 1.3 mmt in 215/16. Domestic barley consumption grows nearly 3% annually on average, increasing Chinese barley net imports to 3.4 mmt by 215/16. Japan s coarse grain imports reach 19.2 mmt by 215/16, while Mexico s increase by more than 5 mmt over the next decade, reaching 15.4 mmt. -2, 1995/96 1999/ 23/4 27/8 211/12 215/16 China Japan Mexico Taiwan Coarse Grain = Corn, Barley, and Sorghum. page 21

FAPRI 26 World Agricultural Outlook Corn Outlook World Corn Stocks-to-Use Ratio vs. Price Dollars per mt Percent 18 4 16 35 14 3 12 25 1 2 8 15 6 4 1 2 5 1995/96 1999/ 23/4 27/8 211/12 215/16 U.S. FOB Gulf Price Stocks-to-Use Ratio In 25/6, corn yields in the world returned to their average levels, decreasing corn production. However, the high stock levels, reminiscent of the high production in 24/5, increased the world corn supply, decreasing the price to $9.16 per mt. In 26/7, world corn consumption increases more than production. Thus, the corn price increases by 9%, to $98.41 per mt. The stocks-to-use ratio is 18.7% in 25/6; it decreases to 16.7% in 26/7 because of the declines in U.S. and Chinese stock levels. World Corn Area, Production, and Consumption Thousand ha 9, 155, 8, 15, 7, 6, 145, 5, 14, 4, 3, 135, 2, 13, 1, In 26/7, world corn area declines slightly; it increases after that, reaching 149.2 mha by 215/16 because of the higher corn prices. Production reaches 786.4 mmt in 215/16 aided by growth in area and yields. Consumption increases in 26/7 to 695.8 mmt because of the increase in food use and ends at 786.5 mmt in 215/16. 125, 1995/96 1999/ 23/4 27/8 211/12 215/16 Production Consumption Area World Corn Feed, Food Use, and Per Capita Consumption 9, 8, 7, 6, 5, 4, 3, 2, 1, kg/ha 4. 35. 3. 25. 2. 15. 1. 5. Feed use increases by 47.5 mmt over the next decade. The largest demand increase comes from Asian countries, followed by Latin American countries. Food use increases by 51.2 mmt over the next 1 years. Both a per capita consumption increase and population growth contribute to the increase in food demand.. 1995/96 1999/ 23/4 27/8 211/12 215/16 Feed Use Food and Other Use Per Capita Consumption page 22

FAPRI 26 World Agricultural Outlook Major Corn Exporters World Corn Net Trade and U.S. Market Share Percent 1, 9 9, 8 8, 7 7, 6 6, 5 5, 4 4, 3, 3 2, 2 1, 1 In 26/7, a higher world corn price decreases the world corn net trade to 73.2 mmt. Over the next 1 years, corn net trade is projected to increase, reaching 88.7 mmt in 215/16 because of demand growth in major importing regions such as Asia and Latin America. The U.S. captures an increasing portion of this demand. Its market share increases from 62.2% in 25/6 to 71.7% in 215/16. 1995/96 1999/ 23/4 27/8 211/12 215/16 Net Trade U.S. Market Share Corn Production by Major Competitors 5, 45, 4, 35, 3, 25, 2, 15, 1, In the next decade, the main U.S. competitors in the corn market increase their production, but their share in world production increases very slightly. Both Argentina and South Africa increase their production by 3 mmt over the next 1 years. An increase in EU NMS production is limited because of the starting of the setaside policy in 29/1. 5, 1995/96 1999/ 23/4 27/8 211/12 215/16 Argentina EU NMS South Africa World Corn Market Shares Percent 25 2 15 1 5-5 1995/96 1999/ 23/4 27/8 211/12 215/16 Argentina EU NMS South Africa Growth in area and yields increases Argentine net exports of corn by 1.5 mmt over the next 1 years. Argentine net exports reach 13 mmt in 215/16, capturing 14.7% of the market. EU NMS increased its production and net exports significantly in 25/6, capturing a larger share of the market. However, in 26/7 its market share decreases with lower production and net exports and continues to decrease slightly over the next 1 years. page 23

FAPRI 26 World Agricultural Outlook Major Corn Importers Corn Net Imports by Major Regions 7, 6, 5, 4, 3, 2, 1, -1, 1995/96 1999/ 23/4 27/8 211/12 215/16 Asia Latin America Middle East Africa The largest demand increase comes from Asian countries because of growth in their livestock industry and therefore in feed demand. Asian net imports increase by 1.8 mmt over the next decade. African net imports increase by 4.2 mmt. Among Latin American countries, Mexico maintains its role as a major importer, with imports reaching 11.7 mmt in 215/16. Middle Eastern corn net imports reach 7.1 mmt in 215/16. Asian Corn Net Imports 4, 3, 2, 1, -1, China becomes a net importer of corn in 211/12, with imports reaching 1.3 mmt in 215/16. South Korea increases its net imports to 9.9 mmt in 215/16 because of higher feed use. Taiwan increases its net imports to 5.4 mmt by 215/16 as feed use increases more than 18% over the next 1 years. Japanese imports decline slightly to 16.4 mmt by 215/16 as feed use decreases. -2, 1995/96 1999/ 23/4 27/8 211/12 215/16 Other Asia China Taiwan India Japan South Korea Chinese Corn Net Imports 4, 2, -2, -4, -6, -8, -1, -12, -14, Once a large net exporter of corn, China is projected to become a net importer in 211/12. Growth in the livestock sector increases feed use by 17.4 mmt over the next decade. Production growth meets only part of this growing demand, as the increase in corn area is limited. Stocks have decreased considerably in the last few years, decreasing the stocks-to-use ratio. By 215/16, the stock-to-use ratio drops to 17%. -16, -18, 1995/96 1999/ 23/4 27/8 211/12 215/16 page 24

FAPRI 26 World Agricultural Outlook Corn Trade 5/6 6/7 7/8 8/9 9/1 1/11 11/12 12/13 13/14 14/15 15/16 Net Exporters (Thousand Metric Tons) Argentina 11,5 1,438 11,511 11,642 11,831 12,75 12,336 12,554 12,7 12,897 13,56 Australia 2 15 18 19 19 18 15 11 6-5 Brazil 1,1 1,391 1,889 2,187 2,672 3,1 3,426 3,53 3,43 3,243 3,1 China 5,8 2,934 2,1 1,52 834 366-361 -689-1,1-1,237-1,328 EU New Member States 5,46 3,252 2,936 2,834 2,78 2,684 2,664 2,634 2,641 2,677 2,686 South Africa 8 1,24 1,247 1,253 1,362 1,35 1,331 1,268 1,192 1,85 943 Thailand 2 235 223 226 256 261 265 263 264 258 256 Ukraine 2,3 2,77 2,987 3,75 3,173 3,19 3,171 3,135 3,91 3,4 2,996 United States 46,738 49,325 49,26 49,918 5,35 51,277 53,211 55,541 58,312 6,936 63,61 Total Net Exports * 75,98 73,254 73,994 74,985 75,694 76,849 78,935 81,389 83,966 86,47 88,76 Net Importers Algeria 1,9 1,944 1,984 1,964 1,962 1,965 1,966 1,97 1,974 1,977 1,981 Canada 1,35 1,52 898 863 795 791 92 1,91 1,328 1,579 1,837 Egypt 5,3 5,312 5,267 5,161 5,78 5,43 5,84 5,173 5,39 5,499 5,716 European Union-15 6,37 3,931 3,995 4,15 3,927 3,8 3,757 3,749 3,744 3,747 3,74 India -1-178 -365-499 -519-477 -419-335 -252-181 -12 Indonesia 55 44 474 55 616 671 747 848 959 1,65 1,164 Israel 8 1, 991 985 981 981 984 991 997 1,3 1,9 Japan 16,5 16,531 16,468 16,45 16,397 16,475 16,56 16,478 16,465 16,458 16,477 Malaysia 2,5 2,479 2,465 2,454 2,451 2,465 2,489 2,516 2,54 2,565 2,59 Mexico 6,695 6,73 6,849 7,444 7,961 8,525 9,12 9,748 1,387 11,29 11,69 Other Africa 3,34 3,46 3,828 4,116 4,375 4,785 5,245 5,727 6,216 6,76 7,198 Other Asia 27 317 363 366 383 423 476 54 66 671 736 Other CIS 185 135 116 139 165 25 244 289 332 378 423 Other Eastern Europe -665-94 -872-97 -1,9-1,41-1,7-1,12-1,8-1,17-1,122 Other Latin America 9,35 9,147 9,17 9,155 9,165 9,198 9,259 9,341 9,43 9,524 9,616 Other Middle East 6, 6,291 6,222 6,172 6,144 6,13 6,128 6,131 6,132 6,132 6,131 Pakistan Philippines 1 119 131 135 134 129 129 14 184 234 275 Russia 2 289 231 215 176 154 16 196 249 295 354 South Korea 8,4 8,48 8,586 8,749 8,91 9,32 9,218 9,445 9,641 9,778 9,893 Taiwan 4,6 4,681 4,912 5,53 5,4 5,26 5,94 5,239 5,358 5,44 5,449 Vietnam 48 41 4 39 49 65 84 14 124 143 Rest of World -415-57 -728-86 -96-1,11-1,28-1,17-998 -982-961 Residual 1,3 1,3 1,3 1,3 1,3 1,3 1,3 1,3 1,3 1,3 1,3 Total Net Imports 75,98 73,254 73,994 74,985 75,694 76,849 78,935 81,389 83,966 86,47 88,76 Coarse Grain Prices (U.S. Dollars per Metric Ton) Corn (FOB Gulf) 9 98 14 19 112 115 116 116 117 117 117 Sorghum (FOB Gulf) 93 15 19 112 115 117 119 119 121 122 123 Barley (Canada Feed) 94 16 17 11 113 117 121 124 127 131 134 * Total net exports are the sum of all positive net exports and negative net imports. Countries included: Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Uzbekistan. Countries included: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Macedonia, Romania, Serbia, Montenegro. page 25

FAPRI 26 World Agricultural Outlook Barley and Sorghum Outlook Barley and Sorghum Net Trade and Prices Dollars per mt 3, 18 16 25, 14 2, 12 1 15, 8 1, 6 4 5, 2 1995/96 1999/ 23/4 27/8 211/12 215/16 Barley Net Trade Sorghum Net Trade Barley (Canada Feed FOB) Sorghum (FOB Gulf) Barley Net Exports by Major Competitors 23, 18, 13, 8, 3, -2, 1995/96 1999/ 23/4 27/8 211/12 215/16 EU-15 Australia Ukraine Canada Russia The world sorghum price increases in 26/7 to $15 per mt as production decreases much more than consumption. Thus, world net trade decreases slightly in 26/7. With the increase in the world sorghum price over the next 1 years, world net trade does not reach its former levels. Lower production in 25/6 decreased barley supply in world markets, increasing its price to $93.9 per mt. Despite higher production in 26/7, lower stock levels decrease the world barley supply, increasing its price to $16.4 per mt. Net trade reaches 2.5 mmt in 215/16, fueled by growth in Asian demand. The EU-15 recovers its barley exports in 26/7 because of higher production. However, net exports of barley fail to reach former high levels in the next decade. Australian and Canadian net exports are 4.8 mmt and 2 mmt, respectively, in 215/16. Lower consumption increases Ukrainian net exports to 4.2 mmt in 26/7, but levels decrease later because of higher feed use. Russian net exports recover in the next decade, reaching 2.6 mmt in 215/16. Sorghum Net Imports by Major Importers and U.S. Market Share 8, 7, 6, 5, 4, 3, 2, 1, Percent 1 95 9 85 8 75 7 65 Japanese net imports are stable at 1.3 mmt in 215/16. Mexico s sorghum imports decrease until 21/11 and then increase, following the pattern of feed use and livestock numbers. Mexican net imports reach 3.5 mmt by 215/16. The U.S. market share follows the path of Mexican sorghum net imports. The U.S. gains market share by 215/16 at the expense of Argentina and Australia. 6 1995/96 1999/ 23/4 27/8 211/12 215/16 Mexico Japan U.S. Market Share page 26

FAPRI 26 World Agricultural Outlook Barley and Sorghum Trade 5/6 6/7 7/8 8/9 9/1 1/11 11/12 12/13 13/14 14/15 15/16 Barley Net Exporters (Thousand Metric Tons) Argentina 2 25 26 22 25 29 217 223 228 233 239 Australia 5,5 4,621 4,533 4,518 4,524 4,557 4,68 4,668 4,724 4,776 4,826 Canada 1,97 1,888 2,229 2,31 2,194 2,18 2,154 2,146 2,116 2,89 2,75 European Union-15 3,68 4,33 4,187 4,6 4,172 4,324 4,399 4,44 4,478 4,59 4,557 Other CIS 6 7 48 29 48 53 98 141 189 236 288 Russia 8 737 1,16 1,463 1,856 1,943 2,2 2,146 2,297 2,462 2,592 Ukraine 3,92 4,232 4,228 4,252 4,175 4,9 4,12 3,948 3,882 3,81 3,744 United States 435 43 484 488 553 581 591 576 539 482 428 Total Net Exports * 16,565 16,514 17,21 17,314 17,727 17,936 18,1 18,288 18,452 18,598 18,749 Net Importers Algeria 2 199 182 177 173 17 16 155 148 141 132 Brazil 15 165 157 142 124 16 93 84 77 7 64 China 2,1 2,11 2,237 2,44 2,561 2,75 2,851 3,1 3,148 3,299 3,448 EU New Member States -1,1-1,27-1,237-1,221-1,13-99 -993-1,2-1,39-1,95-1,135 Israel 45 47 476 477 476 474 472 47 468 466 464 Japan 1,4 1,413 1,442 1,441 1,438 1,44 1,44 1,437 1,434 1,431 1,43 Mexico 75 6 65 74 85 97 18 121 135 15 166 Other Africa 1,32 1,575 1,675 1,79 1,741 1,815 1,889 1,965 2,47 2,13 2,214 Other Asia 1 48 42 7 93 14 12 11 13 13 1 Other Eastern Europe -285-471 -475-476 -485-498 -512-528 -538-552 -566 Other Latin America 355 46 445 477 53 525 546 567 588 61 63 Other Middle East 1,96 2,194 2,286 2,32 2,298 2,274 2,241 2,28 2,174 2,14 2,13 Pakistan Saudi Arabia 6, 5,93 6,8 6,12 6,18 6,19 6,31 6,54 6,7 6,87 6,1 South Africa 1 42 49 51 51 49 45 42 4 39 39 Taiwan 1 13 111 115 116 116 117 12 123 124 126 Rest of World 16 7 79 79 66 51 31 12-7 -26-46 Residual 3,48 3,48 3,48 3,48 3,48 3,48 3,48 3,48 3,48 3,48 3,48 Total Net Imports 16,565 16,514 17,21 17,314 17,727 17,936 18,1 18,288 18,452 18,598 18,749 Sorghum Net Exporters Argentina 3 335 389 373 343 315 283 249 211 177 142 Australia 5 484 521 515 54 499 492 482 47 458 442 United States 4,318 4,247 3,913 3,675 3,672 3,754 3,874 4,8 4,153 4,279 4,48 Total Net Exports * 5,118 5,67 4,823 4,563 4,52 4,568 4,649 4,739 4,835 4,913 4,992 Net Importers India -25-3 -14-14 -1-11 -21-3 -34-41 -39 Israel 5 46 44 44 43 43 43 44 44 45 45 Japan 1,35 1,343 1,334 1,332 1,334 1,343 1,347 1,346 1,346 1,346 1,351 Mexico 3,5 3,475 3,342 3,11 3,73 3,123 3,24 3,288 3,386 3,478 3,562 Nigeria -5-5 -5-5 -5-5 -5-5 -5-5 -5 Pakistan South Africa -25-11 -24-28 -31-33 -34-34 -34-34 -34 Rest of World 46 355 279 257 248 24 247 264 265 257 245 Residual -88-88 -88-88 -88-88 -88-88 -88-88 -88 Total Net Imports 5,118 5,67 4,823 4,563 4,52 4,568 4,649 4,739 4,835 4,913 4,992 Coarse Grain Prices (U.S. Dollars per Metric Ton) Corn (FOB Gulf) 9 98 14 19 112 115 116 116 117 117 117 Sorghum (FOB Gulf) 93 15 19 112 115 117 119 119 121 122 123 Barley (Canada Feed) 94 16 17 11 113 117 121 124 127 131 134 * Total net exports are the sum of all positive net exports and negative net imports. Countries included: Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Uzbekistan. Countries included: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Macedonia, Romania, Serbia and Montenegro. page 27

FAPRI 26 World Agricultural Outlook Oilseeds Outlook World Oilseed Prices Dollars per mt 35 3 25 2 15 1 5 1995/96 1999/ 23/4 27/8 211/12 215/16 The world prices of soybeans and sunflowers weakened this year under the pressure of high supplies while the rapeseed price increased because of strong EU biodiesel demand. For 26/7, another price decline for soybeans is expected despite the production adjustment. This correction leads to a price rebound for soybeans in 27/8. In the long run, all oilseed prices are expected to remain within their established relationships. Soybeans Rapeseed Sunflower Seed World Oilseed Area Thousand ha 25, 2, 15, 1, 5, 1995/96 1999/ 23/4 27/8 211/12 215/16 Soybeans Rapeseed Sunflower Peanuts Palm Oil World oilseed area expanded 1% in 25/6 despite a weaker price last season, primarily because of sunflower area expansion from corn acreage in the CIS. Total area increases by 1% throughout the projection period. Seventysix percent of this increase is due to soybean area expansion in South America. The expected expansion of the oilseed area is caused by increased worldwide demand for protein meals for livestock feed and vegetable oils for human consumption and industrial uses. World Vegetable Oil Consumption 14, 12, 1, 8, 6, 4, 2, 1995/96 1999/ 23/4 27/8 211/12 215/16 World vegetable oil consumption grows 2.9% annually over the next 1 years. Total annual vegetable oil consumption per capita grows from 15.8 kg in 25/6 to 18.9 kg in 215/16. Palm oil surpasses soybean oil to become the most widely used vegetable oil in 27/8. Because of the demand for biodiesel, the industrial use of rapeseed oil in the EU and that of soybean oil in Brazil increases to 4.9 and 1. mmt, respectively, over the next decade. Soy Oil Sunflower Oil Rapeseed Oil Peanut Oil Palm Oil page 28

FAPRI 26 World Agricultural Outlook Soybean Outlook World Soybean Production 3, 25, 2, 15, 1, 5, World soybean production reaches 277 mmt by 215/16, an increase of 24% over the current year. In 212/13, Brazil overtakes the U.S. as the largest soybean producer in the world. At the end of the outlook period Brazil holds a 34% share while the U.S. share drops to 3%. World soybean production is primarily dominated by Argentina, Brazil, and the U.S. (85%) over the outlook period. 1995/96 1999/ 23/4 27/8 211/12 215/16 Argentina Brazil China U.S. ROW World Soybean Consumption 3, 25, 2, 15, 1, 5, The U.S. is currently the world s largest soybean user but is projected to be overtaken by China in 21/11; China s consumption share increases to 24% by 215/16. Brazil and Argentina also expand their respective consumption shares. The EU s share is falling because it imports more soybean meal in preference to beans. Utilization in the ROW accounts for 11% of total world consumption during the projection period. 1995/96 1999/ 23/4 27/8 211/12 215/16 Argentina Brazil China EU U.S. ROW World Soybean Trade 1, 8, 6, 4, 2, -2, -4, -6, -8, -1, 1995/96 1999/ 23/4 27/8 211/12 215/16 Brazil surpasses the U.S. to become the world s largest soybean exporter in 27/8. The share of the U.S. export is projected to decline to 27% by 215/16. Brazil s export share increases from 38% to 51%, given a strong soybean area expansion over the next decade. China remains the largest importer, accounting for 52% of total world imports by 215/16. The EU s import share decreases from 23% to 15% over the next 1 years. U.S. Argentina Brazil Other Exports EU China Japan Other Imports page 29

FAPRI 26 World Agricultural Outlook Soybean Outlook Brazilian Soybean Production and Utilization 1, 9, 5, 45, 8, 4, 7, 35, 6, 3, 5, 25, 4, 2, 3, 15, 2, 1, 1, 5, 1995/96 1999/ 23/4 27/8 211/12 215/16 Brazil s soybean production is projected to reach 93 mmt by 215/16, boosted by further expansion of frontier land and conversion of degraded pasture land. Despite improvements in the Brazilian infrastructure, the domestic crushing industry does not keep pace with the expanding soybean production. The share of domestically processed beans falls from 5% to 45%. Soybean exports grow to 47 mmt by the end of the outlook period, nearly double the current value. Production Consumption Net Exports Argentine Soybean Production and Utilization 6, 5, 4, 3, 2, 1, 16, 1995/96 1999/ 23/4 27/8 211/12 215/16 Production Consumption Net Exports 14, 12, 1, 8, 6, 4, 2, In Argentina increased soybean area generated about 4% production growth in 25/6 despite lower yields. Soybean area is projected to expand by 27% over the outlook period. Additional area, combined with annual yield improvements, results in a 38% production increase by 215/16. Domestic crush dominates bean consumption, accounting for about 7% of the production. Soybean exports increase by 4% to 14 mmt over the next 1 years. Chinese Soybean Production and Utilization 7, 6, 5, 4, 3, 2, 1, 5, 45, 4, 35, 3, 25, 2, 15, 1, 5, Chinese soybean production increases slightly while domestic crush expands by 55% during the outlook period. Increased demand for protein meal for livestock feed, coupled with growing human consumption for vegetable oil, drives the surge of crush demand for beans. Chinese soybean imports reach 48 mmt by 215/16, supporting 74% of China s soybean consumption. 1995/96 1999/ 23/4 27/8 211/12 215/16 Production Consumption Net Imports page 3