Voluntary Report - public distribution

**Date:** 5/7/2004

**GAIN Report Number:** E34011

E34011

**EU-25**

**Grain and Feed**

**Annual**

**2004**

**Approved by:**

![](media/image1.wmf)Christine Strossman

U.S. Mission to the EU

**Prepared by:**

Peter Talks

**Report Highlights:**

EU-25 grain production is set to rebound in MY 04/05 with production
rising 41 MMT to 271 MMT (wheat plus coarse grains). The increased
domestic availability of grain will likely see exports, feed use and
stocks return to trend level, though import requirements are forecast to
decline to just 6.8 MMT from 14.6 MMT and 15.4 MMT in 03/04 and 02/03.
This is due to good domestic availability as well as TRQs effectively
limiting barley and feed quality wheat imports. However, U.S. exports of
high quality wheat to the EU are forecast to be 1.3 MMT in 04/05, the
same level as in 02/03.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Brussels USEU \[BE2\]

\[E3\]

Table of Contents

[**Introduction 2**](#introduction)

[Executive Summary 3](#executive-summary)

[Wheat 4](#wheat)

[Barley 9](#barley)

[Corn 12](#corn)

[Rye 15](#rye)

[Sorghum 16](#sorghum)

[Oats 17](#oats)

[Mixed Grain 18](#mixed-grain)

[Rice 19](#rice)

[EU Feed Grain Table 21](#eu-feed-grain-table)

[Related USEU and European Reports
22](#related-useu-and-european-reports)

# Introduction

This report presents the first grains outlook for Marketing Year (MY)
2004/05 for the European Union. It concentrates on the current
production and market outlook for the Marketing Year (MY) 04/05.

On May 1, 2004, ten New Member States (NMS) joined the EU, namely, the
Czech Republic, Cyprus, Estonia, Hungary, Latvia, Lithuania, Malta,
Poland, Slovakia and Slovenia. This report gives Production Supply and
Demand (PSD) estimates for the EU-25. PSDs for the EU-15 and NMS-10 are
reported for wheat, corn and barley.

Please note that all data provided in this report is based on the
opinion of FAS analysts based in the EU and is not official FAS data.

This is a consolidated EU-25 report prepared with the invaluable input
from the following FAS

analysts:

Bob Flach from FAS The Hague

Xavier Audran from FAS Paris

Steve Knight from FAS London

Diego Pazos from FAS Madrid

Sandro Perini from FAS Rome

Dietmar Achilles from FAS Bonn

Yvan Polet from FAS Brussels

Wlodzimierz Makowski from FAS Warsaw

Dima Prikhodko from FAS Kiev

Note: Data in this report is not official USDA data.

HA = Hectares

MT = Metric ton

MY = Marketing Year. The EU local marketing years used in this report
are July/June, except for Corn which follows October/September and Rice
which is reported on a September/August basis.

# Executive Summary

The first estimate of EU-25 grain production in MY 04/05is 271 MMT. This
is 41 MMT, or 18.5%, higher than the poor crop in 03/04 which was
heavily impacted by drought, heat wave and winterkill. With the increase
in domestic availability, total grain exports, stocks and feed use are
expected to return towards levels seen in 02/03, while EU-25 import
requirements are forecast at the low level of 6.8 MMT, compared to 14.6
MMT in 03/04 and 15.4 MMT in 02/03. This reflects good domestic
availability and the Tariff Rate Quotas (TRQs) which would prevent
substantial imports of Black Sea region feed grains as occurred in MY
02/03.

Wheat production in the EU-25 is set to rebound in 04/05, from the
weather affected 03/04 harvest of 106.7 MMT, rising by over 20 MMT to
127.1 MMT. A 6.2% increase in area planted to wheat is due in part in
the EU-15 to reduction's in the set-aside requirements for MY 04/05 as
well as excellent planting conditions in several countries and no winter
kill during the 2003/04 winter.

The substantial increase in domestic availability is expected to
translate into higher feed use of wheat (+3 MMT), decreased imports
(-2.2 MMT) and higher exports (+5 MMT), as well as a rebuilding of
stocks (+5 MMT). Imports of high quality wheat from U.S. are expected to
continue at a pace of around 1.3 MMT, similar to the import level of
2002/03.

EU-25 barley output in 04/05 is forecast to increase by 5.77 MMT to
60.57 MMT. Increased domestic availability is likely to see a further
increase in barley use as feed from 39.1 MMT to 40.1 MMT. The addition
of the NMS-10 to the EU single market and their consequent adoption of
the EU import tariff of €98/MT will lead to the EU-15 supplying more of
their barley import needs, reducing extra-EU exports of barley to 3.8
MMT, despite expected high prices of world feed grains. An aggressive EU
export subsidy policy for barley is not expected, which would to ensure
the availability of reasonably priced feed grains on the EU markets as
well as encourage stock levels to be rebuilt.

Corn production is set to rebound to 52.07 MMT in MY 04/05, after the
03/04 crop of just 39.2 MMT. With greater domestic availability, EU
imports are expected to decline to just 1.6 MMT. Hungary, with an
exportable corn surplus of 1.6 MMT has full access to the EU single
market following this May's EU enlargement. The low EU-25 import figure
is based on Hungarian corn being competitive in Spanish and Italian
markets displacing some of the traditional corn imports from the
Americas, particularly in the Autumn.

The new rice regime which enters into force on September 1, 2004,
cutting the intervention price for rice in half as well as limiting the
quantities that can be put into intervention, is expected to have very
little impact on EU rice production. However, the price reduction should
help to make EU origin rice much more competitive on the internal
market, although this is difficult to assess until the future status of
the EU rice import regime is known,

# Wheat

**PSD Table EU-25, Wheat**

+---------------------+-------+-------+-------+-------+-------+-------+
| **Country**         | **EU  |       |       |       |       |       |
|                     | -25** |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Commodity**       | ###   |       |       |       | (1000 |       |
|                     | ####  |       |       |       | HA)   |       |
|                     | Wheat |       |       |       | (1000 |       |
|                     |       |       |       |       | MT)   |       |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | 2002  | *     | 2003  | **    | 2004  | **    |
|                     |       | *Revi |       | Estim |       | Forec |
|                     |       | sed** |       | ate** |       | ast** |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | USDA  | *     | USDA  | *     | USDA  | *     |
|                     | Off   | *Post | Off   | *Post | Off   | *Post |
|                     | icial | Est   | icial | Est   | icial | Est   |
|                     | \[    | imate | \[    | imate | \[    | imate |
|                     | Old\] | \[Ne  | Old\] | \[Ne  | Old\] | \[Ne  |
|                     |       | w\]** |       | w\]** |       | w\]** |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Market Year       | *     |       | *     |       | *     |       |
| Begin**             | *07/2 |       | *07/2 |       | *07/2 |       |
|                     | 002** |       | 003** |       | 004** |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Area Harvested      | 0     | 23080 | 0     | 21898 | 0     | 23246 |
+---------------------+-------+-------+-------+-------+-------+-------+
| Beginning Stocks    | 0     | 15373 | 0     | 16116 | 0     | 11718 |
+---------------------+-------+-------+-------+-------+-------+-------+
| Production          | 0     | 1     | 0     | 1     | 0     | 1     |
|                     |       | 24270 |       | 06715 |       | 27088 |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.      | 0     | 10719 | 0     | 6899  | 0     | 4640  |
| Imports             |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Jul-Jun Imports     | 0     | 10719 | 0     | 6899  | 0     | 4640  |
+---------------------+-------+-------+-------+-------+-------+-------+
| Jul-Jun Import U.S. | 0     | 1330  | 0     | 2567  | 0     | 1316  |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL SUPPLY        | 0     | 1     | 0     | 1     | 0     | 1     |
|                     |       | 50362 |       | 29730 |       | 43446 |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.      | 0     | 18658 | 0     | 9069  | 0     | 14175 |
| Exports             |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Jul-Jun Exports     | 0     | 18658 | 0     | 9069  | 0     | 14175 |
+---------------------+-------+-------+-------+-------+-------+-------+
| Feed Dom.           | 0     | 54999 | 0     | 49323 | 0     | 52122 |
| Consumption         |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Dom.          | 0     | 1     | 0     | 1     | 0     | 1     |
| Consumption         |       | 15588 |       | 08943 |       | 12545 |
+---------------------+-------+-------+-------+-------+-------+-------+
| Ending Stocks       | 0     | 16116 | 0     | 11718 | 0     | 16726 |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL DISTRIBUTION  | 0     | 1     | 0     | 1     | 0     | 1     |
|                     |       | 50362 |       | 29730 |       | 43446 |
+---------------------+-------+-------+-------+-------+-------+-------+

Note: All values in 1000 MT, except Area Harvested row in 1000 HA.

Source: FAS EU Posts, not official FAS data.

**EU-25 Wheat PSD data by EU-15 and NMS-10 components**

  ---------------- --------------- ------------ ------------ --------------- ------------ ------------ --------------- ------------ ------------
  1000's MT        **2002/2003**                             **2003/2004**                             **2004/2005**                

                   **NMS 10**      **EU-15**    **EU-25**    **NMS 10**      **EU-15**    **EU-25**    **NMS 10**      **EU-15**    **EU-25**

  Area             5364            17716        23080        4965            16933        21898        5452            17794        23246

  Beginning Stocks 4096            11277        15373        2879            13237        16116        1581            10137        11718

  Production       20590           103680       124270       16083           90632        106715       20125           106963       127088

  MY Imports       436             11633        10719        1535            6138         6899         320             5015         4640

  Jul-Jun Import   104             1226         1330         305             2262         2567         5               1311         1316
  U.S.                                                                                                                              

  **Total Supply** **25122**       **126590**   **150362**   **20497**       **110007**   **129730**   **22026**       **122115**   **143446**

  MY Exports       3449            16559        18658        1050            8793         9069         970             13900        14175

  Dom Consumption  18794           96794        115588       17866           91077        108943       18433           94112        112545

  o.w. FSI         10330           50259        60586        10136           49490        59626        10373           50050        60423

  o.w. Feed        8464            46535        54999        7730            41593        49323        8060            44062        52122

  Ending Stocks    2879            13237        16116        1581            10137        11718        2623            14103        16726

  **Tot            **25122**       **126590**   **150362**   **20497**       **110007**   **129730**   **22026**       **122115**   **143446**
  Distribution**                                                                                                                    
  ---------------- --------------- ------------ ------------ --------------- ------------ ------------ --------------- ------------ ------------

Note: EU-25 trade, total supply and distribution figures are less than
the sum of EU-15 and NMS-10 trade figures, because trade between the two
blocks is not counted as extra-EU trade.

Source: FAS EU Posts, not official FAS data.

**Production**

+------------------------+--------------+--------------+--------------+
| #                      |              |              |              |
| ##### Wheat Production |              |              |              |
+------------------------+--------------+--------------+--------------+
| 1000 MT                | **02/03**    | **03/04**    | **04/05**    |
+------------------------+--------------+--------------+--------------+
| France                 | 38934        | 30483        | 37450        |
+------------------------+--------------+--------------+--------------+
| Germany                | 20818        | 19288        | 25200        |
+------------------------+--------------+--------------+--------------+
| United Kingdom         | 15973        | 14288        | 16180        |
+------------------------+--------------+--------------+--------------+
| Italy                  | 7680         | 6362         | 7000         |
+------------------------+--------------+--------------+--------------+
| Spain                  | 6782         | 6300         | 6900         |
+------------------------+--------------+--------------+--------------+
| Netherlands            | 1057         | 1228         | 1190         |
+------------------------+--------------+--------------+--------------+
| Austria                | 1404         | 1165         | 1260         |
+------------------------+--------------+--------------+--------------+
| Belgium-Luxembourg     | 1765         | 1775         | 1830         |
+------------------------+--------------+--------------+--------------+
| Denmark                | 4040         | 4725         | 4470         |
+------------------------+--------------+--------------+--------------+
| Finland                | 570          | 550          | 670          |
+------------------------+--------------+--------------+--------------+
| Greece                 | 1160         | 1230         | 1100         |
+------------------------+--------------+--------------+--------------+
| Ireland                | 963          | 750          | 1000         |
+------------------------+--------------+--------------+--------------+
| Portugal               | 434          | 203          | 313          |
+------------------------+--------------+--------------+--------------+
| Sweden                 | 2100         | 2285         | 2400         |
+------------------------+--------------+--------------+--------------+
| **EU15 Total**         | **103,680**  | **90,632**   | **106,963**  |
+------------------------+--------------+--------------+--------------+
| Cyprus                 | 10           | 10           | 10           |
+------------------------+--------------+--------------+--------------+
| Czech R.               | 3867         | 2600         | 3700         |
+------------------------+--------------+--------------+--------------+
| Estonia                | 148          | 157          | 140          |
+------------------------+--------------+--------------+--------------+
| Hungary                | 3900         | 2900         | 4400         |
+------------------------+--------------+--------------+--------------+
| Latvia                 | 473          | 325          | 400          |
+------------------------+--------------+--------------+--------------+
| Lithuania              | 1218         | 1191         | 1100         |
+------------------------+--------------+--------------+--------------+
| Malta                  | 5            | 5            | 5            |
+------------------------+--------------+--------------+--------------+
| Poland                 | 9304         | 7858         | 8700         |
+------------------------+--------------+--------------+--------------+
| Slovakia               | 1555         | 967          | 1550         |
+------------------------+--------------+--------------+--------------+
| Slovenia               | 110          | 70           | 120          |
+------------------------+--------------+--------------+--------------+
| **NMS 10 total**       | **20,590**   | **16,083**   | **20,125**   |
+------------------------+--------------+--------------+--------------+
| **EU-25 Total**        | **124,270**  | **106,715**  | **127,088**  |
+------------------------+--------------+--------------+--------------+

Source: FAS EU Posts.

Wheat production in the EU-25 is set to rebound in 04/05, from the
weather affected 03/04 harvest of 106.7 MMT, rising by over 20 MMT to
127.1 MMT. There is probably more potential on the upside for this
number than to the downside. A 6.2% increase in area planted to wheat,
due in part in the EU-15 to reductions in the set-aside requirements for
MY 04/05 as well as excellent planting conditions in several countries
and no winter kill during the 2003/04 winter.

French area planted to wheat is set higher for 04/05. In MY 03/04,
winterkill had reduced the wheat area harvested. In addition, there is a
long term trend of increasing area planted to wheat, as well as on going
improvements to wheat seeds and varieties. Production for 04/05 is
estimated at 37.4 MMT, though it is still early in the growing season.
Some areas, particularly in Eastern France, have poor moisture reserves
in the soil which could leave them vulnerable to poor rainfall.

Germany also sees an increase in area planted to wheat, with no winter
kill, unlike in 03/04, as well as a small shift from spring to winter
grains and also the replacement of some barley with wheat. As a result,
output for 04/05 is estimated at 25.2 MMT, up from 19.3 MMT in 2003/04.
Preliminary indications are that around 40 to 45% of plantings are of
the highest quality wheat varieties.

In the UK, area planted to wheat is also set to rise in 2004/05 due to
the set-aside changes as well as in response to this year's high wheat
prices. Similarly in both the Netherlands and Belgium, good conditions
and the set-aside changes encouraged an increase in area planted to
wheat.

Italy also sees a marginal increase in area planted to wheat, though
production is set higher due to an expected recovery from the poor
weather last year, as well as the good weather conditions during the
planting season.

In Spain, a small reduction to the area planted to wheat was due to
heavy rains in the planting season last Autumn leading to a switch
towards spring barley. However, excellent growing conditions have given
a crop that has no reported problems leading to expectations of a high
output with record durum wheat production. The durum what harvest is
expected to start in early to mid May

In the NMS-10, wheat production is also set to rebound from 16.1 MMT in
03/04 to 20.1 MMT in 04/05, with a 10% increase in wheat area reflecting
both a small shift towards wheat from other crops and the near absence
of winter kill. Yields are also expected to revert to normal after last
year's poor crop. (See GAIN Reports HU 4007 and PL 4011 for more details
on Hungary and Poland, links are provided in the Related USEU and
European Reports Section towards the end of the report).

**Consumption and Trade**

With a lower expected price for new crop wheat in 04/05 and much greater
domestic availability, feed use of wheat is expected to recover from the
low level of 41.6 MMT in 03/04 in the EU-15 to 44.0 MMT in 04/05. In the
NMS-10, a corresponding rise from 7.7 MMT to 8.1 MMT is expected.

In 03/04, despite the poor crop, European imports of wheat fell. This
was due to high domestic prices encouraging a shift towards greater use
of alternative feed sources. The very poor harvests in Russia and the
Ukraine also cut off supplies of feed grains that had been imported into
the EU in 02/03.

For example, in Germany, despite the smaller wheat crop in MY 03/04,
imports also fell due to high domestic prices reducing demand for wheat.
Based on the pace of imports to date in 03/04 imports are expected to
decline by 400,000 MT.

Italy continues to be the world's largest wheat importer. In MY 03/04
wheat imports rose following the poor domestic durum crop, with over 2
MMT durum imported (including 0.5 to 0.6 MMT of low quality Canadian
durum from the 2002 crop). However, soft wheat imports declined
marginally due to a slight fall in feed demand. Over 1.1 MMT of US wheat
was imported into Italy in MY 03/04, with around 750,000 MT of
traditional northern spring wheat, as well as several hundred thousand
tons of SRW varieties.

In Spain, during MY 03/04, both imports and exports of wheat declined
dramatically. Imports fell following the lack of availability of Black
Sea feed wheat, which was partly replaced by wheat imports from Brazil
(around 200,000 MT). Exports were reduced by the excellent crops in much
of North Africa. Lower exports lead to increased domestic availability
which was easily absorbed by increased feed demand. During much of the
03/04 marketing year, high and low quality wheat was priced at the same
level in Spanish markets.

In the Netherlands, in MY 03/04, both domestic production and
availability were good. During the course of the MY, the high price of
wheat led to stocks being run down and some demand for feed wheat
replaced with tapioca and feed peas. Imports also declined with import
prices being similarly high. In 04/05, wheat supply, imports and feed
demand are expected to return to more typical levels.

For 03/04, 9.1 MMT of wheat and wheat products[^1] are expected to be
exported outside of the EU-25, with a further 1 MMT to 1.2 MMT exports
expected between April and the end of the MY in June, primarily from
France to North Africa.

German exports also declined, by around 1.3 MMT to 1.4 MMT, again due to
the smaller crop and high prices rendering exports generally
uncompetitive. In the final two months of the 03/04 MY there may be some
demand for German wheat in the New Member States, particularly Poland
and the Czech Republic.

Italian pasta exports for 03/04 are set to decline, due to the strong
Euro as well as lower exports to Germany.

Prices for the new crop would appear to indicate that there may be some
degree of price advantage for French exports on some nearby export
markets, particularly if US autumn prices trend upwards.

In MY 04/05, Spanish exports are estimated to be at a stable level of
1.2 MMT, with the primary markets being in North Africa and the
Americas, particularly for flour, semolina and pasta exports.

For Italy, in MY 04/05, the level of imports is expected to decline with
a larger domestic crop.

In 04/05, an expected increase in German production will likely reduce
imports by a further 400,000 MT. Exports would be expected to be higher,
at around 6.5 MMT, though the German wheat may not be as competitive as
French wheat, in which case some German wheat would likely be put into
intervention. Therefore, estimated ending stocks are raised by 2.5 MMT
for MY 04/05. This is partly due to the fact that from some regions of
Germany, it is costly to ship grains to exporting ports, while there is
nearby access to grain intervention centres.

In the UK, in MY 03/04 feed consumption of wheat declined due to a
switch to feed barley on price grounds. This trend is set to reverse in
04/05. The UK is a stable market for high quality wheat imports. The
division of exports between EU and extra EU destinations will depend on
the quality of the 2004 wheat harvest.

Spanish 04/05 import estimates of 1.1 MMT are based on 900,000 MMT
imports from the Black Sea region as well as 200,000 MT from the US and
some limited Canadian imports. In 04/05, Spanish feed demand for wheat
is expected to rise slightly, replacing corn and non-grain feed
ingredients (NGFI).

In Poland, 1.1 MMT were exported during MY 02/03, in particular just
prior to the end of the season, as most of the government held wheat
stocks were liquidated. Unfortunately, the very poor 03/04 harvest led
to a significant shortage of feed grains, with imports of wheat for
03/04 estimated to be around 800,000 MT. In 04/05, import estimates of
300,000 MT are based on the durum and high quality wheat needed for
blending in flour and pasta production. Feed demand is set to decline by
200,000 MT due to reduced pig and livestock inventory.

**Stocks**

Following the poor European harvest, with limited domestic availability
of wheat, stocks were run down in 03/04 from 16.1 MMT at the start of
the MY to an estimated 11.7 MMT at the end of the MY in June 2004. With
a bumper crop expected in 2004, a substantial rebuilding of stocks is
expected, with Post estimating stocks to rise to 16.7 MMT at the end of
the MY 04/05.

# Barley

**PSD Table EU-25, Wheat**

+---------------------+-------+-------+-------+-------+-------+-------+
| **Country**         | **EU  |       |       |       |       |       |
|                     | -25** |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Commodity**       | ####  |       |       |       | (1000 |       |
|                     | ### B |       |       |       | HA)   |       |
|                     | arley |       |       |       | (1000 |       |
|                     |       |       |       |       | MT)   |       |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | 2002  | *     | 2003  | **    | 2004  | **    |
|                     |       | *Revi |       | Estim |       | Forec |
|                     |       | sed** |       | ate** |       | ast** |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | USDA  | *     | USDA  | *     | USDA  | *     |
|                     | Off   | *Post | Off   | *Post | Off   | *Post |
|                     | icial | Est   | icial | Est   | icial | Est   |
|                     | \[    | imate | \[    | imate | \[    | imate |
|                     | Old\] | \[Ne  | Old\] | \[Ne  | Old\] | \[Ne  |
|                     |       | w\]** |       | w\]** |       | w\]** |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Market Year       | *     |       | *     |       | *     |       |
| Begin**             | *07/2 |       | *07/2 |       | *07/2 |       |
|                     | 002** |       | 003** |       | 004** |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Area Harvested      | 0     | 13416 | 0     | 13425 | 0     | 13668 |
+---------------------+-------+-------+-------+-------+-------+-------+
| Beginning Stocks    | 0     | 9121  | 0     | 7362  | 0     | 5474  |
+---------------------+-------+-------+-------+-------+-------+-------+
| Production          | 0     | 56391 | 0     | 54803 | 0     | 60571 |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.      | 0     | 1329  | 0     | 815   | 0     | 351   |
| Imports             |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Imports     | 0     | 1329  | 0     | 815   | 0     | 351   |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Import U.S. | 0     | 14    | 0     | 20    | 0     | 50    |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL SUPPLY        | 0     | 66841 | 0     | 62980 | 0     | 66396 |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.      | 0     | 4926  | 0     | 2894  | 0     | 3817  |
| Exports             |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Exports     | 0     | 5108  | 0     | 2894  | 0     | 3817  |
+---------------------+-------+-------+-------+-------+-------+-------+
| Feed Dom.           | 0     | 38134 | 0     | 39126 | 0     | 40117 |
| Consumption         |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Dom.          | 0     | 54553 | 0     | 54612 | 0     | 55219 |
| Consumption         |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Ending Stocks       | 0     | 7362  | 0     | 5474  | 0     | 7360  |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL DISTRIBUTION  | 0     | 66841 | 0     | 62980 | 0     | 66396 |
+---------------------+-------+-------+-------+-------+-------+-------+

Note: All values in 1000 MT, except Area Harvested row in 1000 HA.

Source: FAS EU Posts, not official FAS data.

**EU-25 Barley PSD data by EU-15 and NMS-10 components**

  ---------------- --------------- ----------- ----------- --------------- ----------- ----------- --------------- ----------- -----------
  1000's MT        **2002/2003**                           **2003/2004**                           **2004/2005**               

                   **NMS 10**      **EU-15**   **EU-25**   **NMS 10**      **EU-15**   **EU-25**   **NMS 10**      **EU-15**   **EU-25**

  Area             2822            10594       13416       2805            10620       13425       2952            10716       13668

  Beginning Stocks 870             8251        9121        731             6631        7362        475             4999        5474

  Production       8426            47965       56391       7969            46834       54803       8805            51766       60571

  MY Imports       636             867         1329        970             350         815         680             321         351

  Oct-Sep Imp U.S. 0               14          14          0               20          20          0               50          50

  **Total Supply** **9932**        **57083**   **66841**   **9670**        **53815**   **62980**   **10070**       **57086**   **66396**

  MY Exports       190             4910        4926        430             2969        2894        110             4357        3817

  Dom Consumption  9011            45542       54553       8765            45847       54612       8952            46267       55219

  o.w. FSI         2087            14332       16419       2127            13359       15486       2172            13540       15712

  o.w. Feed        6924            31210       38134       6638            32488       39126       6775            33342       40117

  Ending Stocks    731             6631        7362        475             4999        5474        898             6462        7360

  **Tot            **9932**        **57083**   **66841**   **9670**        **53815**   **62980**   **10070**       **57086**   **66396**
  Distribution**                                                                                                               
  ---------------- --------------- ----------- ----------- --------------- ----------- ----------- --------------- ----------- -----------

Source: FAS EU Posts, not official FAS data.

**Production**

+------------------------+--------------+--------------+--------------+
| ##                     |              |              |              |
| #### Barley Production |              |              |              |
+------------------------+--------------+--------------+--------------+
| 1000 MT                | **02/03**    | **03/04**    | **04/05**    |
+------------------------+--------------+--------------+--------------+
| France                 | 10988        | 9940         | 11350        |
+------------------------+--------------+--------------+--------------+
| Germany                | 10928        | 10637        | 13000        |
+------------------------+--------------+--------------+--------------+
| United Kingdom         | 6128         | 6370         | 6158         |
+------------------------+--------------+--------------+--------------+
| Italy                  | 1190         | 1008         | 1150         |
+------------------------+--------------+--------------+--------------+
| Spain                  | 8333         | 8700         | 9500         |
+------------------------+--------------+--------------+--------------+
| Netherlands            | 315          | 372          | 400          |
+------------------------+--------------+--------------+--------------+
| Austria                | 850          | 869          | 880          |
+------------------------+--------------+--------------+--------------+
| Belgium-Luxembourg     | 396          | 335          | 380          |
+------------------------+--------------+--------------+--------------+
| Denmark                | 4078         | 3760         | 3794         |
+------------------------+--------------+--------------+--------------+
| Finland                | 1566         | 1700         | 1800         |
+------------------------+--------------+--------------+--------------+
| Greece                 | 432          | 430          | 300          |
+------------------------+--------------+--------------+--------------+
| Ireland                | 963          | 1162         | 1184         |
+------------------------+--------------+--------------+--------------+
| Portugal               | 20           | 9            | 20           |
+------------------------+--------------+--------------+--------------+
| Sweden                 | 1778         | 1542         | 1850         |
+------------------------+--------------+--------------+--------------+
| **EU15 Total**         | **47,965**   | **46,834**   | **51,766**   |
+------------------------+--------------+--------------+--------------+
| Cyprus                 | 100          | 100          | 100          |
+------------------------+--------------+--------------+--------------+
| Czech R.               | 1792         | 2070         | 2000         |
+------------------------+--------------+--------------+--------------+
| Estonia                | 249          | 163          | 280          |
+------------------------+--------------+--------------+--------------+
| Hungary                | 1100         | 825          | 1100         |
+------------------------+--------------+--------------+--------------+
| Latvia                 | 215          | 175          | 240          |
+------------------------+--------------+--------------+--------------+
| Lithuania              | 871          | 939          | 850          |
+------------------------+--------------+--------------+--------------+
| Malta                  | 2            | 2            | 2            |
+------------------------+--------------+--------------+--------------+
| Poland                 | 3369         | 2831         | 3300         |
+------------------------+--------------+--------------+--------------+
| Slovakia               | 695          | 831          | 900          |
+------------------------+--------------+--------------+--------------+
| Slovenia               | 33           | 33           | 33           |
+------------------------+--------------+--------------+--------------+
| **NMS 10 total**       | **8,426**    | **7,969**    | **8,805**    |
+------------------------+--------------+--------------+--------------+
| **EU-25 Total**        | **56,391**   | **54,803**   | **60,571**   |
+------------------------+--------------+--------------+--------------+

Source: FAS EU Posts.

Across the EU-25, the outlook for barley production in 04/05 looks
favourable, with the expected output more than bouncing back from last
year's drought impacted crop. Year on year an output increase of 5.77
MMT to 60.57 MMT is forecast. Current reports indicate that the crop
looks in good condition in the main producers France, Spain and Germany.

In Germany, no winter kill, combined with good soil moisture conditions
and growth currently around ten days ahead of normal give expectations
of an excellent outlook for barley production, and should growing
conditions remain favourable, record yields could be obtained from the
2004 crop. Protein content for malting barley is not expected to be a
problem as fields were in excellent condition early in the growing
season enabling farmers to prepare their crops in ideal conditions.

In Spain, a good crop in 04/05 is expected with production some 500,000
MT higher than MY 03/04. Part of this increase is due to very wet
conditions in the autumn which prevented winter wheat from being sown,
instead the area planted to winter barley rose.

In Italy too, autumn planting conditions encouraged a small increase in
area planted to winter barley, with a production outlook estimated at
3.3 MMT, a return to more typical output levels after last years heat
wave.

In the UK, the set-aside relaxation announced last Fall has lead to a
small increase in area planted to winter barley.

**Consumption**

A new malting plant is being built in the north of the Netherlands, with
an expected eventual capacity of 165,000 MT barley per annum. As it is
not due to open until 2005, FSI barley consumption is raised by 65,000
MT for 2004/05 to take this into account. In addition, new malting
barley capacity is reported in Sweden (100,000 MT extra barley needed in
MY 04/05), France (65,000 MT) and Belgium (65,000 MT).

In Spain, the availability of barley in 04/05 is expected to lead to an
increase in its use as feed, though Spain will still be a net importer
of barley. Ethanol production in Spain now uses up to 300,000 MT of
barley per year.

In France, the Netherlands and the UK, minor declines in barley feed use
are expected due to wheat becoming slightly more competitive as feed, as
well as a return to typical levels in the Netherlands when barley
replaced some other feed ingredients.

**Trade**

During the last two months of MY 03/04, some shipments of barley are
expected to be made to the Baltic States (following EU enlargement on
May 1, extra-EU imports into the NMS will face EU tariffs, encouraging
intra-EU trade, with there being free circulation of goods inside the
EU).

The addition of deficit regions of the NMS such as Malta and Cyprus to
the EU will likely see the replacement of barley sourced previously from
the Black Sea region by EU origin barley due to the €93/MT that imports
from the Black Sea would now face post EU enlargement in the NMS.

Overall EU-25 barley imports are estimated to be at 350,000 MT in 04/05,
similar to the EU-15 level in 03/04. This figure is mostly the TRQs
available for EU barley imports. The NMS-10 will continue to have net
imports of barley of around 0.5 MMT, though from 04/05, sourced
predominantly from the EU-15. This trade diversion from the EU-15 will
also reduce the exportable surplus from the EU-25, despite the high
level of domestic availability and expected high world feed grain
prices.

**Stocks**

It is also expected that EU barley stocks will be replaced in 04/05,
after seeing a 1.9 MMT run down in stocks in MY 03/04, a comparable
amount is expected to be used to rebuild stocks. During MY 04/05 some
barley in Germany is expected to be put into intervention as some
production areas do not have access to a cheap transport infrastructure.

# Corn

+---------------------+-------+-------+-------+-------+-------+-------+
| **Country**         | **EU  |       |       |       |       |       |
|                     | -25** |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Commodity**       | ##    |       |       |       | (1000 |       |
|                     | ##### |       |       |       | HA)   |       |
|                     |  Corn |       |       |       | (1000 |       |
|                     |       |       |       |       | MT)   |       |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | 2002  | *     | 2003  | **    | 2004  | **    |
|                     |       | *Revi |       | Estim |       | Forec |
|                     |       | sed** |       | ate** |       | ast** |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | USDA  | *     | USDA  | *     | USDA  | *     |
|                     | Off   | *Post | Off   | *Post | Off   | *Post |
|                     | icial | Est   | icial | Est   | icial | Est   |
|                     | \[    | imate | \[    | imate | \[    | imate |
|                     | Old\] | \[Ne  | Old\] | \[Ne  | Old\] | \[Ne  |
|                     |       | w\]** |       | w\]** |       | w\]** |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Market Year       | *     |       | *     |       | *     |       |
| Begin**             | *10/2 |       | *10/2 |       | *10/2 |       |
|                     | 002** |       | 003** |       | 004** |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Area Harvested      | 0     | 6006  | 0     | 6036  | 0     | 6307  |
+---------------------+-------+-------+-------+-------+-------+-------+
| Beginning Stocks    | 0     | 4075  | 0     | 4901  | 0     | 3128  |
+---------------------+-------+-------+-------+-------+-------+-------+
| Production          | 0     | 48202 | 0     | 39158 | 0     | 52072 |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.      | 0     | 2731  | 0     | 5048  | 0     | 1578  |
| Imports             |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Imports     | 0     | 2731  | 0     | 5048  | 0     | 1578  |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Import U.S. | 0     | 47    | 0     | 23    | 0     | 19    |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL SUPPLY        | 0     | 55008 | 0     | 49107 | 0     | 56778 |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.      | 0     | 831   | 0     | 8     | 0     | 936   |
| Exports             |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Exports     | 0     | 831   | 0     | 8     | 0     | 936   |
+---------------------+-------+-------+-------+-------+-------+-------+
| Feed Dom.           | 0     | 38486 | 0     | 35210 | 0     | 40182 |
| Consumption         |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Dom.          | 0     | 49276 | 0     | 45971 | 0     | 51609 |
| Consumption         |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Ending Stocks       | 0     | 4901  | 0     | 3128  | 0     | 4233  |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL DISTRIBUTION  | 0     | 55008 | 0     | 49107 | 0     | 56778 |
+---------------------+-------+-------+-------+-------+-------+-------+

Note: All values in 1000 MT, except Area Harvested row in 1000 HA.

Source: FAS EU Posts, not official FAS data.

**EU-25 Corn PSD data by EU-15 and NMS-10 components**

  ---------------- --------------- ----------- ----------- --------------- ----------- ----------- --------------- ----------- -----------
  1000's MT        **2002/2003**                           **2003/2004**                           **2004/2005**               

                   **NMS 10**      **EU-15**   **EU-25**   **NMS 10**      **EU-15**   **EU-25**   **NMS 10**      **EU-15**   **EU-25**

  Area             1723            4283        6006        1731            4305        6036        1845            4462        6307

  Beginning Stocks 1318            2757        4075        1596            3305        4901        1019            2109        3128

  Production       9682            38520       48202       7870            31288       39158       10745           41327       52072

  MY Imports       372             3203        2731        836             4820        5048        158             2050        1578

  Oct-Sep Imp U.S. 30              17          47          0               23          23          0               19          19

  **Total Supply** **11372**       **44480**   **55008**   **10302**       **39413**   **49107**   **11922**       **45486**   **56778**

  MY Exports       1525            150         831         560             56          8           1253            313         936

  Dom Consumption  8251            41025       49276       8723            37248       45971       9201            42408       51609

  o.w. FSI         1091            9699        10790       1007            9754        10761       1346            10081       11427

  o.w. Feed        7160            31326       38486       7716            27494       35210       7855            32327       40182

  Ending Stocks    1596            3305        4901        1019            2109        3128        1468            2765        4233

  **Tot            **11372**       **44480**   **55008**   **10302**       **39413**   **49107**   **11922**       **45486**   **56778**
  Distribution**                                                                                                               
  ---------------- --------------- ----------- ----------- --------------- ----------- ----------- --------------- ----------- -----------

Source: FAS EU Posts, not official FAS data.

+------------------------+--------------+--------------+--------------+
| ###### Corn Production |              |              |              |
+------------------------+--------------+--------------+--------------+
| 1000 MT                | **02/03**    | **03/04**    | **04/05**    |
+------------------------+--------------+--------------+--------------+
| France                 | 16095        | 11770        | 16750        |
+------------------------+--------------+--------------+--------------+
| Germany                | 3738         | 2800         | 3960         |
+------------------------+--------------+--------------+--------------+
| United Kingdom         | 0            | 0            | 0            |
+------------------------+--------------+--------------+--------------+
| Italy                  | 10200        | 8100         | 11500        |
+------------------------+--------------+--------------+--------------+
| Spain                  | 4463         | 4300         | 4600         |
+------------------------+--------------+--------------+--------------+
| Netherlands            | 169          | 155          | 172          |
+------------------------+--------------+--------------+--------------+
| Austria                | 1658         | 1427         | 1650         |
+------------------------+--------------+--------------+--------------+
| Belgium-Luxembourg     | 508          | 530          | 525          |
+------------------------+--------------+--------------+--------------+
| Denmark                | 0            | 0            | 0            |
+------------------------+--------------+--------------+--------------+
| Finland                | 0            | 0            | 0            |
+------------------------+--------------+--------------+--------------+
| Greece                 | 840          | 1300         | 1330         |
+------------------------+--------------+--------------+--------------+
| Ireland                | 0            | 0            | 0            |
+------------------------+--------------+--------------+--------------+
| Portugal               | 849          | 906          | 840          |
+------------------------+--------------+--------------+--------------+
| Sweden                 | 0            | 0            | 0            |
+------------------------+--------------+--------------+--------------+
| **EU15 Total**         | **38,520**   | **31,288**   | **41,327**   |
+------------------------+--------------+--------------+--------------+
| Cyprus                 | 0            | 0            | 0            |
+------------------------+--------------+--------------+--------------+
| Czech R.               | 616          | 476          | 370          |
+------------------------+--------------+--------------+--------------+
| Estonia                | 0            | 0            | 0            |
+------------------------+--------------+--------------+--------------+
| Hungary                | 6000         | 4600         | 6900         |
+------------------------+--------------+--------------+--------------+
| Latvia                 | 0            | 0            | 0            |
+------------------------+--------------+--------------+--------------+
| Lithuania              | 0            | 0            | 0            |
+------------------------+--------------+--------------+--------------+
| Malta                  | 0            | 0            | 0            |
+------------------------+--------------+--------------+--------------+
| Poland                 | 1962         | 1884         | 2400         |
+------------------------+--------------+--------------+--------------+
| Slovakia               | 754          | 687          | 750          |
+------------------------+--------------+--------------+--------------+
| Slovenia               | 350          | 220          | 325          |
+------------------------+--------------+--------------+--------------+
| **NMS 10 total**       | **9,682**    | **7,870**    | **10,745**   |
+------------------------+--------------+--------------+--------------+
| **EU-25 Total**        | **48,202**   | **39,158**   | **52,072**   |
+------------------------+--------------+--------------+--------------+

Source: FAS EU Posts.

EU-25 corn output is expected to more than bounce back from the poor
03/04 harvest, with production in the EU-15 set to rise by 10 MMT to
41.3 MMT in 04/05, for an EU-25 wide total of 52.07 MMT.

In the EU-15, the lowering of the set-aside requirements from 10% to 5%
has helped to increase area planted to corn in some countries such as
Italy and Spain. High corn prices have also encouraged a switch to corn
particularly at the expense of sunflowerseed in Spain and Italy.

The German area planted to corn is down year on year, as last years corn
plantings were boosted by high levels of winter kill being later
replanted to corn. The current outlook for the MY 04/05 corn crop is
good, though it is not thought to be as good as the banner 2001 crop.
The outlook for the French crop also looks good, although it is still
only early in the corn production cycle. Polish corn output is expected
to resume its trend of gradually rising output

**Consumption**

EU-25 feed use of corn declined from 38.5 MMT in 02/03, to just 35.2 MMT
in 03/04 following the drought ravaged crop in 03/04. With a good
harvest expected in 2004, a reversion to a more typical feed use level
of 40.2 MMT is predicted. For example, French corn feed use patterns are
expected to return to trend.

The poor French corn crop in 03/04 lead to lower feed use of corn in the
Netherlands, replaced by rye, barley, tapioca and feed peas. Some
imports are still expected from Hungary and Argentina during the
remaining months of the 2003/04 MY. However, the feed industry is
reporting to prefer to wait for the French new crop and its lower
expected prices, so there is a certain reluctance to import during the
last couple of months of the 03/04 marketing year.

In the Netherlands, the new biotech traceability and labelling
Regulations are not expected to have any impact on the 1.2 MMT of Corn
Gluten Feed imported each year.

Non feed corn consumption in Spain is stable. Around 800,000 MT of corn
by products are used in the feed industry each year. The EU's recent
traceability and labelling Regulations concerning biotech production
could impact on this trade from the US if varieties planted in the US
are not approved in the EU, though trade sources indicate that they do
not think this will be a problem in 2004/05. Spanish feed corn demand is
expected to decline a little in 04/05 as wheat and barley are favoured
in feed.

Overall Polish feed demand is expected to fall by around 1 MMT in 04/05
due partly to structural problems in the Polish livestock sector, and
partly to the downturn in the pig cycle. However, poultry feed demand is
expected to rise. With lower feed demand and improved domestic supply of
corn, import demand should fall substantially. It should be noted that
there is a degree of trade off between rye and corn in Polish feed use,
so their relative prices should help to indicate feed use levels over
the course of MY 04/05.

**Trade**

In 03/04, the poor European availability of corn led to imports of 5 MMT
from extra-EU sources, including 2.1 MMT to Spain, some paying the full
EU import duty and over 700,000 MT of Brazilian corn to Italy.

MY 04/05 extra-EU imports of corn are predicted to decline to just 1.6
MMT due to a good domestic crop. This figure is also based on the
Hungarian exportable surplus of 1.55 MMT being competitive on Spanish
and Italian markets displacing extra-EU imports, particularly under
scenarios with high prices of U.S. and Argentine corn.

In Germany 2003/04, total imports of corn are expected to end at around
1 MMT, with fewer exports than normal. In 04/05, forecasts are based on
exports rising and import levels being reduced.

**Biotech Corn**

There are currently some 18 varieties of biotech corn approved for
planting in Spain. The area planted to biotech corn in Spain in MY 03/04
was around 32,000 hectares. This is expected to rise to around 50,000
hectares in 04/05. Farmers growing biotech are reported to be very
comfortable and happy with biotech corn.

The entire Spanish biotech corn production is delivered to local feed
millers. Wet millers use GM free corn sourced from either France or
Brazil.

# Rye

+---------------------+-------+-------+-------+-------+-------+-------+
| **Country**         | **EU  |       |       |       |       |       |
|                     | -25** |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Commodity**       | #     |       |       |       | (1000 |       |
|                     | ##### |       |       |       | HA)   |       |
|                     | # Rye |       |       |       | (1000 |       |
|                     |       |       |       |       | MT)   |       |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | 2002  | *     | 2003  | **    | 2004  | **    |
|                     |       | *Revi |       | Estim |       | Forec |
|                     |       | sed** |       | ate** |       | ast** |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | USDA  | *     | USDA  | *     | USDA  | *     |
|                     | Off   | *Post | Off   | *Post | Off   | *Post |
|                     | icial | Est   | icial | Est   | icial | Est   |
|                     | \[    | imate | \[    | imate | \[    | imate |
|                     | Old\] | \[Ne  | Old\] | \[Ne  | Old\] | \[Ne  |
|                     |       | w\]** |       | w\]** |       | w\]** |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Market Year       | *     |       | *     |       | *     |       |
| Begin**             | *07/2 |       | *07/2 |       | *07/2 |       |
|                     | 002** |       | 003** |       | 004** |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Area Harvested      | 0     | 2882  | 0     | 2569  | 0     | 2738  |
+---------------------+-------+-------+-------+-------+-------+-------+
| Beginning Stocks    | 0     | 6514  | 0     | 6125  | 0     | 3654  |
+---------------------+-------+-------+-------+-------+-------+-------+
| Production          | 0     | 9168  | 0     | 6920  | 0     | 8784  |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.      | 0     | 491   | 0     | 308   | 0     | 127   |
| Imports             |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Imports     | 0     | 549   | 0     | 25    | 0     | 127   |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Import U.S. | 0     | 0     | 0     | 0     | 0     | 0     |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL SUPPLY        | 0     | 16173 | 0     | 13353 | 0     | 12565 |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.      | 0     | 640   | 0     | 421   | 0     | 575   |
| Exports             |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Exports     | 0     | 698   | 0     | 421   | 0     | 575   |
+---------------------+-------+-------+-------+-------+-------+-------+
| Feed Dom.           | 0     | 5063  | 0     | 5073  | 0     | 4714  |
| Consumption         |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Dom.          | 0     | 9408  | 0     | 9278  | 0     | 9109  |
| Consumption         |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Ending Stocks       | 0     | 6125  | 0     | 3654  | 0     | 2881  |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL DISTRIBUTION  | 0     | 16173 | 0     | 13353 | 0     | 12565 |
+---------------------+-------+-------+-------+-------+-------+-------+

Note: All values in 1000 MT, except Area Harvested row in 1000 HA.

Source: FAS EU Posts, not official FAS data.

+------------------------+--------------+--------------+--------------+
| ###### Rye Production  |              |              |              |
+------------------------+--------------+--------------+--------------+
| 1000 MT                | **02/03**    | **03/04**    | **04/05**    |
+------------------------+--------------+--------------+--------------+
| Germany                | 3666         | 2278         | 3600         |
+------------------------+--------------+--------------+--------------+
| Other EU-15            | 1074         | 937          | 996          |
+------------------------+--------------+--------------+--------------+
| Poland                 | 3831         | 3172         | 3500         |
+------------------------+--------------+--------------+--------------+
| Other NMS-10           | 597          | 533          | 688          |
+------------------------+--------------+--------------+--------------+
| **EU-25 Total**        | **9,168**    | **6,920**    | **8,784**    |
+------------------------+--------------+--------------+--------------+

Source: FAS EU Posts.

In 04/05, a recovery in rye output to 3.6 MMT is expected following the
poor yields recorded in 03/04. With little alternative planting options
in rye producing areas of Poland and Germany, little impact is expected
from the removal of rye from the list of interventionable grains from
July 2004. In Germany, reduction in rye area has already occurred over
the preceding years, while in Poland, only minor changes to rye area are
expected.

Current price expectations for the new crop rye in 04/05 are around
€85-95/MT, a discount of around €35/MT to wheat.

The increase in EU-25 FSI consumption of rye from 4.2 MMT in 03/04 to
4.4 MMT is mainly due to rye being used for ethanol production in
eastern Germany, as otherwise rye non-feed consumption is stable across
all of the EU.

Total EU stocks of rye were reduced by 2.5 MMT during 03/04. The
destocking of rye is expected to continue, albeit at a slower rate in
04/05, particularly as new crop rye will no longer be accepted into
intervention following last year's CAP Reform.

# Sorghum

+---------------------+-------+-------+-------+-------+-------+-------+
| **Country**         | **EU  |       |       |       |       |       |
|                     | -25** |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Commodity**       | ##### |       |       |       | (1000 |       |
|                     | ## So |       |       |       | HA)   |       |
|                     | rghum |       |       |       | (1000 |       |
|                     |       |       |       |       | MT)   |       |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | 2002  | *     | 2003  | **    | 2004  | **    |
|                     |       | *Revi |       | Estim |       | Forec |
|                     |       | sed** |       | ate** |       | ast** |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | USDA  | *     | USDA  | *     | USDA  | *     |
|                     | Off   | *Post | Off   | *Post | Off   | *Post |
|                     | icial | Est   | icial | Est   | icial | Est   |
|                     | \[    | imate | \[    | imate | \[    | imate |
|                     | Old\] | \[Ne  | Old\] | \[Ne  | Old\] | \[Ne  |
|                     |       | w\]** |       | w\]** |       | w\]** |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Market Year       | *     |       | *     |       | *     |       |
| Begin**             | *07/2 |       | *07/2 |       | *07/2 |       |
|                     | 002** |       | 003** |       | 004** |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Area Harvested      | 0     | 113   | 0     | 103   | 0     | 107   |
+---------------------+-------+-------+-------+-------+-------+-------+
| Beginning Stocks    | 0     | 24    | 0     | 57    | 0     | 25    |
+---------------------+-------+-------+-------+-------+-------+-------+
| Production          | 0     | 706   | 0     | 408   | 0     | 608   |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.      | 0     | 34    | 0     | 1555  | 0     | 125   |
| Imports             |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Imports     | 0     | 34    | 0     | 1555  | 0     | 125   |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Import U.S. | 0     | 143   | 0     | 962   | 0     | 0     |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL SUPPLY        | 0     | 764   | 0     | 2020  | 0     | 758   |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.      | 0     | 2     | 0     | 13    | 0     | 5     |
| Exports             |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Exports     | 0     | 5     | 0     | 13    | 0     | 5     |
+---------------------+-------+-------+-------+-------+-------+-------+
| Feed Dom.           | 0     | 690   | 0     | 1960  | 0     | 687   |
| Consumption         |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Dom.          | 0     | 705   | 0     | 1982  | 0     | 702   |
| Consumption         |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Ending Stocks       | 0     | 57    | 0     | 25    | 0     | 51    |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL DISTRIBUTION  | 0     | 764   | 0     | 2020  | 0     | 758   |
+---------------------+-------+-------+-------+-------+-------+-------+

Note: All values in 1000 MT, except Area Harvested row in 1000 HA.

Source: FAS EU Posts, not official FAS data.

For MY 04/05, current forecasts for US production are for a mediocre
output, perhaps coupled with relatively high prices, which would mean a
reduction in EU imports to a more typical level after the high level of
imports in 2003/04.

Currently, in Spain, sorghum is priced at around €160/MT (€110 FOB US
plus circa €40 for freight as well as the €12 import duty), which makes
it uncompetitive versus other feed grains, so no further substantial
imports are expected during the remaining part of the 03/04 season.
Further, in May, Spanish harvesting starts and with expectations of a
record durum wheat crop of 2.3 MMT, May/June prices for durum at €160/MT
would see some durum wheat used as feed. (In MY 03/04, around 800,000 MT
of high quality wheat was used as feed).

# Oats

+---------------------+-------+-------+-------+-------+-------+-------+
| **Country**         | **EU  |       |       |       |       |       |
|                     | -25** |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Commodity**       | ##    |       |       |       | (1000 |       |
|                     | ##### |       |       |       | HA)   |       |
|                     |  Oats |       |       |       | (1000 |       |
|                     |       |       |       |       | MT)   |       |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | 2002  | *     | 2003  | **    | 2004  | **    |
|                     |       | *Revi |       | Estim |       | Forec |
|                     |       | sed** |       | ate** |       | ast** |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | USDA  | *     | USDA  | *     | USDA  | *     |
|                     | Off   | *Post | Off   | *Post | Off   | *Post |
|                     | icial | Est   | icial | Est   | icial | Est   |
|                     | \[    | imate | \[    | imate | \[    | imate |
|                     | Old\] | \[Ne  | Old\] | \[Ne  | Old\] | \[Ne  |
|                     |       | w\]** |       | w\]** |       | w\]** |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Market Year       | *     |       | *     |       | *     |       |
| Begin**             | *07/2 |       | *07/2 |       | *07/2 |       |
|                     | 002** |       | 003** |       | 004** |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Area Harvested      | 0     | 2990  | 0     | 2903  | 0     | 2842  |
+---------------------+-------+-------+-------+-------+-------+-------+
| Beginning Stocks    | 0     | 886   | 0     | 965   | 0     | 988   |
+---------------------+-------+-------+-------+-------+-------+-------+
| Production          | 0     | 9331  | 0     | 8666  | 0     | 8774  |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.      | 0     | 7     | 0     | 15    | 0     | 8     |
| Imports             |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Imports     | 0     | 10    | 0     | 25    | 0     | 8     |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep U.S.        | 0     | 0     | 0     | 0     | 0     | 0     |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL SUPPLY        | 0     | 10224 | 0     | 9646  | 0     | 9770  |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.      | 0     | 903   | 0     | 375   | 0     | 566   |
| Exports             |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Exports     | 0     | 908   | 0     | 375   | 0     | 566   |
+---------------------+-------+-------+-------+-------+-------+-------+
| Feed Dom.           | 0     | 6748  | 0     | 6726  | 0     | 6686  |
| Consumption         |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Dom.          | 0     | 8356  | 0     | 8283  | 0     | 8241  |
| Consumption         |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Ending Stocks       | 0     | 965   | 0     | 988   | 0     | 963   |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL DISTRIBUTION  | 0     | 10224 | 0     | 9646  | 0     | 9770  |
+---------------------+-------+-------+-------+-------+-------+-------+

Note: All values in 1000 MT, except Area Harvested row in 1000 HA.

Source: FAS EU Posts, not official FAS data.

# Mixed Grain

+---------------------+-------+-------+-------+-------+-------+-------+
| **Country**         | **EU  |       |       |       |       |       |
|                     | -25** |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Commodity**       | ####  |       |       |       | (1000 |       |
|                     | ### M |       |       |       | HA)   |       |
|                     | ixed  |       |       |       | (1000 |       |
|                     | Grain |       |       |       | MT)   |       |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | 2002  | *     | 2003  | **    | 2004  | **    |
|                     |       | *Revi |       | Estim |       | Forec |
|                     |       | sed** |       | ate** |       | ast** |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | USDA  | *     | USDA  | *     | USDA  | *     |
|                     | Off   | *Post | Off   | *Post | Off   | *Post |
|                     | icial | Est   | icial | Est   | icial | Est   |
|                     | \[    | imate | \[    | imate | \[    | imate |
|                     | Old\] | \[Ne  | Old\] | \[Ne  | Old\] | \[Ne  |
|                     |       | w\]** |       | w\]** |       | w\]** |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Market Year       | *     |       | *     |       | *     |       |
| Begin**             | *07/2 |       | *07/2 |       | *07/2 |       |
|                     | 002** |       | 003** |       | 004** |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Area Harvested      | 0     | 3703  | 0     | 3839  | 0     | 3734  |
+---------------------+-------+-------+-------+-------+-------+-------+
| Beginning Stocks    | 0     | 1134  | 0     | 818   | 0     | 467   |
+---------------------+-------+-------+-------+-------+-------+-------+
| Production          | 0     | 13435 | 0     | 12178 | 0     | 13283 |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.      | 0     | 0     | 0     | 0     | 0     | 0     |
| Imports             |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Imports     | 0     | 0     | 0     | 0     | 0     | 0     |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Import U.S. | 0     | 0     | 0     | 0     | 0     | 0     |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL SUPPLY        | 0     | 14569 | 0     | 12996 | 0     | 13750 |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.      | 0     | 17    | 0     | 0     | 0     | 0     |
| Exports             |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Exports     | 0     | 17    | 0     | 0     | 0     | 0     |
+---------------------+-------+-------+-------+-------+-------+-------+
| Feed Dom.           | 0     | 13009 | 0     | 11832 | 0     | 12093 |
| Consumption         |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Dom.          | 0     | 13734 | 0     | 12529 | 0     | 12863 |
| Consumption         |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Ending Stocks       | 0     | 818   | 0     | 467   | 0     | 887   |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL DISTRIBUTION  | 0     | 14569 | 0     | 12996 | 0     | 13750 |
+---------------------+-------+-------+-------+-------+-------+-------+

Note: All values in 1000 MT, except Area Harvested row in 1000 HA.

Source: FAS EU Posts, not official FAS data.

Poland is the major European producer of mixed grains. In 04/05, the
area planted to mixed grains is expected to continue to be stable at 2.4
m ha., of which around 40% is triticale. Polish 04/05 mixed grain
production is forecast to be 7 MMT.

French mixed grain production is predominantly triticale. Production has
been gradually increasing, from 354,000 hectares planted in 02/03, to an
expected 380,000 hectares in 04/05, with production of 1.8 MMT.
Triticale is grown in the French corn producing regions.

In Germany, the 04/05 triticale production is expected to rise
significantly, from 2.7 MMT in 03/04, to 3.4 MMT in 04/05, due to yield
recovery. In the market, it is generally priced around the same level as
rye, though as a feed ingredient it is viewed as superior to rye. Some
exports of 350,000 MT are expected from Germany to the Netherlands and
Denmark, though German triticale could also end up on Polish and Czech
markets.

# Rice

+---------------------+-------+-------+-------+-------+-------+-------+
| **Country**         | **EU  |       |       |       |       |       |
|                     | -25** |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Commodity**       | ##    |       |       |       | (1000 |       |
|                     | ##### |       |       |       | HA)   |       |
|                     |  Rice |       |       |       | (1000 |       |
|                     |       |       |       |       | MT)   |       |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | 2002  | *     | 2003  | **    | 2004  | **    |
|                     |       | *Revi |       | Estim |       | Forec |
|                     |       | sed** |       | ate** |       | ast** |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | USDA  | *     | USDA  | *     | USDA  | *     |
|                     | Off   | *Post | Off   | *Post | Off   | *Post |
|                     | icial | Est   | icial | Est   | icial | Est   |
|                     | \[    | imate | \[    | imate | \[    | imate |
|                     | Old\] | \[Ne  | Old\] | \[Ne  | Old\] | \[Ne  |
|                     |       | w\]** |       | w\]** |       | w\]** |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Market Year       | *     |       | *     |       | *     |       |
| Begin**             | *09/2 |       | *09/2 |       | *09/2 |       |
|                     | 002** |       | 003** |       | 004** |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Area Harvested      | 0     | 401   | 0     | 408   | 0     | 416   |
+---------------------+-------+-------+-------+-------+-------+-------+
| Beginning Stocks    | 0     | 685   | 0     | 799   | 0     | 749   |
+---------------------+-------+-------+-------+-------+-------+-------+
| Milled Production   | 0     | 1733  | 0     | 1664  | 0     | 1764  |
+---------------------+-------+-------+-------+-------+-------+-------+
| Rough Production    | 0     | 2637  | 0     | 2666  | 0     | 2717  |
+---------------------+-------+-------+-------+-------+-------+-------+
| MILLING RATE        | 0     | 6572  | 0     | 6241  | 0     | 6493  |
| (.9999)             |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.      | 0     | 1198  | 0     | 1020  | 0     | 1039  |
| Imports             |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Jan-Dec Imports     | 0     | 950   | 0     | 1020  | 0     | 1039  |
+---------------------+-------+-------+-------+-------+-------+-------+
| Jan-Dec Import U.S. | 0     | 163   | 0     | 168   | 0     | 193   |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL SUPPLY        | 0     | 3616  | 0     | 3483  | 0     | 3552  |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.      | 0     | 220   | 0     | 225   | 0     | 249   |
| Exports             |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Jan-Dec Exports     | 0     | 220   | 0     | 225   | 0     | 249   |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Dom.          | 0     | 2597  | 0     | 2509  | 0     | 2529  |
| Consumption         |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Ending Stocks       | 0     | 799   | 0     | 749   | 0     | 774   |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL DISTRIBUTION  | 0     | 3616  | 0     | 3483  | 0     | 3552  |
+---------------------+-------+-------+-------+-------+-------+-------+

Note: All values in 1000 MT, except Area Harvested row in 1000 HA.

Source: FAS EU Posts, not official FAS data.

+------------------------+--------------+--------------+--------------+
| ###### Rice Production |              |              |              |
+------------------------+--------------+--------------+--------------+
| 1000 MT                | **02/03**    | **03/04**    | **04/05**    |
+------------------------+--------------+--------------+--------------+
| Italy                  | 870          | 779          | 875          |
+------------------------+--------------+--------------+--------------+
| Spain                  | 570          | 598          | 608          |
+------------------------+--------------+--------------+--------------+
| Other EU-25            | 293          | 287          | 281          |
+------------------------+--------------+--------------+--------------+
| **EU-25 Total**        | **1,733**    | **1,664**    | **1,764**    |
+------------------------+--------------+--------------+--------------+

Source: FAS EU Posts.

**Production**

From the 1^st^ of September 2004, a new rice regime comes into force,
the main essence of which is a halving of the intervention price for
paddy rice from €298 to €150 and a limit of 75,000 MT imposed on annual
intervention. Producers are compensated for the intervention price cut
by increased direct payments, based on the historical yields. These
direct payments will, from 2006, be partially decoupled from production,
with the first 60% being paid regardless of what the farmer produces,
the remaining 40% being triggered if the farmer produces rice. In
practice, this partial decoupling is not expected to have any impact on
production. As the increase in direct payments does not quite fully
compensate the price reduction, rice farmer's revenue may decline
marginally, though this is offset by being able to sell rice at a much
lower price, which should enable markets to be developed or expanded.

Spanish rice production in 04/05 is estimated to be marginally higher
year on year, partly due to area overshoot penalties being less severe.
Yields continue to improve and farmers generally have access to plenty
of water.

In the longer term, the area planted to rice in Spain is unlikely to
increase as quotas for rice area are distributed to autonomous regions
who are in line with their quotas, except for Extremadura and Andalucia
which are over quota area and where growers face subsidy reductions.
Without these penalties, area would likely increase substantially.

In Italy, rice area and production in MY 04/05 are expected to return to
usual levels following the drought impacted 03/04 crop. Partial
decoupling of rice support will not begin until MY 05/06.

**Consumption**

Spanish rice consumption has over previous years increased, in
particular due to increased immigration from South America, whose per
capita consumption of rice is some five or six times higher than the
Spanish average of 10 kg per person per year. Elsewhere in the EU
consumption is seen as stable.

**Trade**

In the NMS, rice is often consumed by those in lower income groups due
to its cheap price. However, from May 1, 2004, rice imports to the NMS
from outside the EU-25 now have to pay (high) EU tariffs. There is
already some evidence that some of the flows of cheaper Asian origin
rice are being displaced by the cheaper Italian milled rice varieties.

Spanish rice exports are stable, though, as lower prices for long grain
varieties are expected, in 04/05, there may be the possibility of some
extra-EU exports with little or no subsidies. The Italian milling
industry see EU enlargement as a new market opportunity, particularly as
extra-EU exports in recent years have been more or less limited to food
aid shipments.

Currently in Italy near by June to August milled bagged indica is being
quoted around €435/MT ex mill, but from September onwards quotes drop to
around €345/MT. However, while the price is expected to drop with the
September 1 intervention price cut, how far this will fall will depend
on the interplay between farmers, millers and wholesalers. With
continued uncertainty over what the future EU rice import regime will
look like, predictions are difficult to make, though trade sources have
indicated that they expect to see milled Italian indica prices stabilize
somewhere between €300 to €350/MT.

# EU Feed Grain Table

**EU-15 Consumption of feed grains, 2002/03 and 2003/04 compared**

<table style="width:100%;">
<colgroup>
<col style="width: 11%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
</colgroup>
<tbody>
<tr class="odd">
<td>MMT</td>
<td colspan="3"><strong>Wheat</strong></td>
<td colspan="3"><strong>Corn</strong></td>
<td colspan="3"><strong>Other Coarse Grains</strong></td>
<td colspan="3"><strong>Total</strong></td>
</tr>
<tr class="even">
<td></td>
<td>02/03</td>
<td>03/04</td>
<td>04/05</td>
<td>02/03</td>
<td>03/04</td>
<td>04/05</td>
<td>02/03</td>
<td>03/04</td>
<td>04/05</td>
<td>02/03</td>
<td>03/04</td>
<td>04/05</td>
</tr>
<tr class="odd">
<td>France</td>
<td>11.3</td>
<td>9.6</td>
<td>11.0</td>
<td>5.4</td>
<td>3.2</td>
<td>5.7</td>
<td>6.4</td>
<td>6.6</td>
<td>6.5</td>
<td>23.1</td>
<td>19.4</td>
<td>23.2</td>
</tr>
<tr class="even">
<td>Germany</td>
<td>9.1</td>
<td>9.2</td>
<td>9.2</td>
<td>2.9</td>
<td>2.4</td>
<td>2.7</td>
<td>12.5</td>
<td>12.3</td>
<td>12.8</td>
<td>24.6</td>
<td>23.9</td>
<td>24.7</td>
</tr>
<tr class="odd">
<td>UK</td>
<td>6.9</td>
<td>6.4</td>
<td>6.7</td>
<td>0.4</td>
<td>0.4</td>
<td>0.3</td>
<td>3.7</td>
<td>3.8</td>
<td>3.5</td>
<td>10.9</td>
<td>10.6</td>
<td>10.5</td>
</tr>
<tr class="even">
<td>Italy</td>
<td>2.1</td>
<td>1.6</td>
<td>1.7</td>
<td>9.4</td>
<td>9.3</td>
<td>10.8</td>
<td>2.2</td>
<td>2.7</td>
<td>2.2</td>
<td>13.7</td>
<td>13.6</td>
<td>14.6</td>
</tr>
<tr class="odd">
<td>Spain</td>
<td>6.4</td>
<td>4.4</td>
<td>5.1</td>
<td>6.6</td>
<td>6.6</td>
<td>6.5</td>
<td>8.8</td>
<td>10.2</td>
<td>9.8</td>
<td>21.7</td>
<td>21.2</td>
<td>21.3</td>
</tr>
<tr class="even">
<td>Other EU15</td>
<td>10.7</td>
<td>9.5</td>
<td>10.3</td>
<td>6.3</td>
<td>5.7</td>
<td>6.4</td>
<td>11.8</td>
<td>12.5</td>
<td>12.2</td>
<td>28.8</td>
<td>27.7</td>
<td>28.8</td>
</tr>
<tr class="odd">
<td><p id="total-eu15" class="heading">Total EU15</p></td>
<td><strong>46.5</strong></td>
<td><strong>40.7</strong></td>
<td><strong>43.8</strong></td>
<td><strong>30.8</strong></td>
<td><strong>27.5</strong></td>
<td><strong>32.3</strong></td>
<td><strong>45.3</strong></td>
<td><strong>48.2</strong></td>
<td><strong>46.9</strong></td>
<td><strong>122.7</strong></td>
<td><strong>116.3</strong></td>
<td><strong>123.1</strong></td>
</tr>
<tr class="even">
<td>Poland</td>
<td>4.0</td>
<td>3.8</td>
<td>3.6</td>
<td>1.8</td>
<td>2.4</td>
<td>2.2</td>
<td>13.0</td>
<td>11.3</td>
<td>11.1</td>
<td>18.7</td>
<td>17.5</td>
<td>16.9</td>
</tr>
<tr class="odd">
<td>Other NMS</td>
<td>4.5</td>
<td>3.9</td>
<td>4.5</td>
<td>5.4</td>
<td>5.3</td>
<td>5.7</td>
<td>5.3</td>
<td>5.3</td>
<td>5.6</td>
<td>15.2</td>
<td>14.5</td>
<td>15.7</td>
</tr>
<tr class="even">
<td>Total NMS</td>
<td>8.5</td>
<td>7.7</td>
<td>8.1</td>
<td>7.2</td>
<td>7.7</td>
<td>7.9</td>
<td>18.3</td>
<td>16.6</td>
<td>16.8</td>
<td>33.9</td>
<td>32.0</td>
<td>32.7</td>
</tr>
<tr class="odd">
<td><p id="total-eu25" class="heading">Total EU25 </p></td>
<td><strong>55.0</strong></td>
<td><strong>48.4</strong></td>
<td><strong>51.9</strong></td>
<td><strong>38.0</strong></td>
<td><strong>35.2</strong></td>
<td><strong>40.2</strong></td>
<td><strong>63.6</strong></td>
<td><strong>64.7</strong></td>
<td><strong>63.7</strong></td>
<td><strong>156.6</strong></td>
<td><strong>148.3</strong></td>
<td><strong>155.8</strong></td>
</tr>
</tbody>
</table>

Source: FAS Post Estimates

# Related USEU and European Reports

**May 7 2004 \| Portugal** 

Portugal\'s 2004 grain harvest will be significantly higher than last
year due to improved yields. Wheat production is forecast at 313,000
tons and corn, at 795,000 tons. With improved domestic and European
crops, Portugal's imports from the U.S. will likely decline in MY
2004/05: imports of U.S. wheat should return to the "normal" level of
around 60,000 tons of high-protein wheat (140,000 tons in 2003/04).

**PO4009** \| [View the Acrobat
version](http://www.fas.usda.gov/gainfiles/200405/146106235.pdf) \| [Download
the MS Word
version](http://www.fas.usda.gov/gainfiles/200405/146106235.doc)

**May 11 2004 \| Poland \| Annual**

Highlight: Polish MY 2004/05 grain production is expected to rise 12
percent due to much improved weather conditions compared to MY 2003/04
weather related losses. MY 04/05 imports are expected to decline due to
reduced swine production, stocks will be replenished, and exports will
be negligible. Poland joined the EU on May 1, 2004. It is undergoing a
policy transition period, but farmer incomes are generally expected to
rise. Poland is now in an internal EU-25 market. It will implement EU
consistent third-country grain trade policy including elimination of
weed seed zero tolerance trade constraints.

**PL4011** \| [View the Acrobat
version](http://www.fas.usda.gov/gainfiles/200405/146106254.pdf) \| [Download
the MS Word
version](http://www.fas.usda.gov/gainfiles/200405/146106254.doc)

**Apr 29 2004 \| EU-25** \| **EU Grain Intervention Centres in the New
Member States** 

*Highlight:* The EU has published the list of grain intervention centres
for the 10 New Member States who will join the EU on May 1, 2004.

**E34001** \| [View the Acrobat
version](http://www.fas.usda.gov/gainfiles/200404/146106142.pdf) \| [Download
the MS Word
version](http://www.fas.usda.gov/gainfiles/200404/146106142.doc)

**Apr 6 2004 \| Hungary** \| **Annual** 

*Highlight:* Report Highlights: After the very low grain harvest in
2003, Hungary's grain trade is small. The upcoming EU accession will not
result in major changes in the growing pattern. Normal weather points to
an average crop in 2004. Contracting animal production will result in
higher wheat and corn exports in 2004/2005. Hungary strictly follows EU
biotechnology regulations, and it is expected that biotech varieties
will not be introduced in the next few years.

**HU4007** \| [View the Acrobat
version](http://www.fas.usda.gov/gainfiles/200404/146105886.pdf) \| [Download
the MS Word
version](http://www.fas.usda.gov/gainfiles/200404/146105886.doc)

**Mar 15 2004 \| EU-15** \| **EU Commission grain market data available
on line** 

*Highlight:* Data from the EU grain market management committee of the
European Commission is now available on line via

<http://europa.eu.int/comm/agriculture/markets/crops/index_en.htm>. The
data, updated weekly, includes coverage of current EU import and export
license certificates, export subsidy levels, trade flows with central
and eastern Europe and new legislation affecting the EU grains market.

**E24049** \| [View the Acrobat
version](http://www.fas.usda.gov/gainfiles/200403/146105651.pdf) \| [Download
the MS Word
version](http://www.fas.usda.gov/gainfiles/200403/146105651.doc)

**Mar 15 2004 \| Czech Republic** \| **Czech Government Opens Duty Free
Import Quota** 

*Highlight:* On February 5, the Ministry of Agriculture issued a
restriction on wheat exports until May 1, 2004\--the date the Czech
Republic joins the EU. The Ministry also plans to release 400,000 MT of
wheat from its strategic reserves and has announced a duty-free import
quota for 300,000 MT of milling wheat until April 30, 2004 (so far
24,000 MT have been imported). This duty-free access provides an
immediate opportunity for U.S. exporters.

**EZ4004** \| [View the Acrobat
version](http://www.fas.usda.gov/gainfiles/200403/146105646.pdf) \| [Download
the MS Word
version](http://www.fas.usda.gov/gainfiles/200403/146105646.doc)

**Mar 15 2004 \| Spain** \| **Spanish Grain Market** 

*Highlight:* U.S. grain exports to Spain in MY 2003/04 are the best seen
in several years: total sorghum shipments should reach 500,000 tons and
wheat, around 600,000 tons. Spanish feed manufacturers have been highly
critical of the EU\'s calculation of the import duty on sorghum; they
say that by understating freight rates, the EU is keeping the duty
artificially high and discouraging imports. Looking toward next season,
high levels of precipitation in Spain over the past 4 months have
established conditions for an above-average grain crop in 2004. However,
the size of the mostly non-irrigated crop will depend on crucial rain
during the heading period in March, April and May. More winter grain is
expected to be planted in the autumn of 2004, due to lower mandatory
set-aside area and to current high prices for grains.

**SP4005** \| [View the Acrobat
version](http://www.fas.usda.gov/gainfiles/200403/146105645.pdf) \| [Download
the MS Word
version](http://www.fas.usda.gov/gainfiles/200403/146105645.doc)

**Feb 17 2004 \| Hungary** \| **Government Issues Wheat Export Levies** 

*Highlight:* On January 19, the Government of Hungary (GOH) issued an
order to impose export levies on wheat and wheat flour until May 1,
2004, the date Hungary joins the EU. The GOH also plans to release
120,000 MT of wheat from its strategic reserves for flour milling and
has opened duty-free import quotas for wheat and rye (400,000 MT each)
for the period of January- May 1, 2004. Commercial interest for duty
free import quota shares is high, but no purchases have been reported
yet.

**HU4003** \| [View the Acrobat
version](http://www.fas.usda.gov/gainfiles/200402/146105443.pdf) \| [Download
the MS Word
version](http://www.fas.usda.gov/gainfiles/200402/146105443.doc)

**Feb 11 2004 \| Poland** \| **Poland Corn Import Rise** 

*Highlight:* Poland corn imports, mostly from Brazil, have risen
dramatically due largely to production shortages, rising wheat versus
corn prices, and new duty free grain import quotas only valid until
Poland's May 1, 2004 EU accession. However, the pace of imports appears
to be slowing because of factors related to possible high stock fees,
speculations that some current Polish grain needs will be met within an
expanded EU, and stabilizing yet high domestic prices.

**PL4003** \| [View the Acrobat
version](http://www.fas.usda.gov/gainfiles/200402/146105395.pdf) \| [Download
the MS Word
version](http://www.fas.usda.gov/gainfiles/200402/146105395.doc)

**Jan 15 2004 \| Czech Republic** \| **November Grain Situation**

*Highlight:* Wheat production for MY 03/04 amounted to 2.6 million MT, a
32% decrease from the previous year. Barley production amounted to 2
million MT, a 16% increase. Corn production dropped to 435,000 MT due to
low yields from dry weather. Increased area and high yields resulted in
significantly larger oat production at 240,000 MT. At present, the
Ministry of Agriculture is contemplating the use of export restrictions
for wheat.

**EZ3017** \| [View the Acrobat
version](http://www.fas.usda.gov/gainfiles/200401/146085576.pdf) \| [Download
the MS Word
version](http://www.fas.usda.gov/gainfiles/200401/146085576.doc)

**Jan 12 2004 \| EU-15** \| **EU adapts timing of 2004 US rice TRQs to
suit EU accession** 

*Highlight:* The European Commission has published a Regulation which
adapts the timing of the Tariff Rate Quotas for rice for 2004. The
European Commission explain that the changes were made to take into
account of EU enlargement in May 2004 and enable operators in the New
Member States to be able to participate. The quantities for the
different rice TRQs have not been changed, only the timing within the
year.

**E24005** \| [View the Acrobat
version](http://www.fas.usda.gov/gainfiles/200401/146085587.pdf) \| [Download
the MS Word
version](http://www.fas.usda.gov/gainfiles/200401/146085587.doc)

**Jan 12 2004 \| EU-15** \| **EU restricts Basmati rice varieties
eligible for reduced import tariffs** 

*Highlight:* The European Commission has published a Regulation which
defines the Basmati rice varieties from India and Pakistan which are
eligible for a €250 tariff reduction. The new list removes Pakistan\'s
\"Super\" and India\'s \"Pusa\" varieties. The government of Pakistan
was strongly opposed to this move which will effectively prevent the
only commercially grown Basmati variety in Pakistan from being exported
to the EU.

**E24004** \| [View the Acrobat
version](http://www.fas.usda.gov/gainfiles/200401/146085586.pdf) \| [Download
the MS Word
version](http://www.fas.usda.gov/gainfiles/200401/146085586.doc)

**Dec 23 2003 \| EU-15** \| **EU Commission defends Basmati rice import
policy** 

*Highlight:* The UK government used the December Agriculture Council to
question the European Commission\'s recent proposals to restrict Indian
and Pakistani Basmati rice exports to the EU. The Commission defended
the recent proposals to remove Pakistani\'s \'Super\' variety and
India\'s \'Pusa\' variety from the list of varieties eligible for the
€250/MT tariff abatement. The amendment to the EU rice import
legislation is expected to be formally approved and published before the
end of the year, entering into force on January 1, 2004.

**E23249** \| [View the Acrobat
version](http://www.fas.usda.gov/gainfiles/200312/146085442.pdf) \| [Download
the MS Word
version](http://www.fas.usda.gov/gainfiles/200312/146085442.doc)

**Dec 17 2003 \| EU-15** \| **Expected impact of the EU set-aside
reduction to 5% in 2004/05** 

*Highlight:* The Commission has proposed to reduce the compulsory
set-aside rate for arable crops from 10% to 5% for 2004/05. This is
because of the poor harvest in 2003. The lower set-aside rate is
expected to lead to an extra 7 MMT of EU grain production in 2004/05,
which will in turn increase consumption by 3 MMT, exports by 2 MMT and
stocks by 2 MMT, according to Commission calculations. Higher ending
stocks in 2004/05 would then lead to a reduction of 1.5 MMT in
production in 2005/06. The extra costs to the EU budget will be around
€74 m. spread over 2005 and 2006.

**E23240** \| [View the Acrobat
version](http://www.fas.usda.gov/gainfiles/200312/146085380.pdf) \| [Download
the MS Word
version](http://www.fas.usda.gov/gainfiles/200312/146085380.doc)

**Dec 16 2003 \| EU-15** \| **Grain and Feed Semi-Annual** 

*Highlight:* A severe drought and heat wave across southern Europe
reduced EU-15 grain production from 210 MMT in 2002/03 to 184.8 MMT in
2003/04. This has helped to create a shortage of feed grains in Europe,
leading to higher prices and reduced exports. Poor harvests in Central
and Eastern Europe as well as the Black Sea region have reduced import
availability with imports of wheat expected from the U.S. as well as
corn imports from South America. Continued high prices and a tight EU
grain balance sheet are expected to continue till the summer of 2004.
Should the production outlook for 04/05 look poor, EU markets could
react nervously.

**E23239** \| [View the Acrobat
version](http://www.fas.usda.gov/gainfiles/200312/146085384.pdf) \| [Download
the MS Word
version](http://www.fas.usda.gov/gainfiles/200312/146085384.doc)

**Dec 10 2003 \| Spain** \| **Heavy Rains Delay Spanish Winter Grain
Planting** 

*Highlight:* Heavy rains are washing out the prospects for a big 2004
winter gain crop. Castilla-Leon, the country\'s most important
production area, has been especially hard hit.

**SP3046** \| [View the Acrobat
version](http://www.fas.usda.gov/gainfiles/200312/146085324.pdf) \| [Download
the MS Word
version](http://www.fas.usda.gov/gainfiles/200312/146085324.doc)

**Dec 9 2003 \| Hungary** \| **November Grain Situation** 

*Highlight:* Wheat prices are nearly double last year, and spring
futures indicate a further 25-30 % increase. The wheat export surplus is
400,000 MT at most with half of this volume already shipped to
neighbouring countries. The poor corn harvest, at about 4.5 million MT,
reduced export surpluses to 500,000 MT. Hungary may increase their rye
and feed barley purchases from Europe and overseas. The GOH issued a
100,000 MT duty-free import quota for rye, barley, and oats and plans to
issue a new quota of 150,000 MT for 2004.

**HU3014** \| [View the Acrobat
version](http://www.fas.usda.gov/gainfiles/200312/146085309.pdf) \| [Download
the MS Word
version](http://www.fas.usda.gov/gainfiles/200312/146085309.doc)

**Dec 9 2003 \| Portugal** \| **Tight Supply Situation Draws U.S. Grain
into Portugal** 

*Highlight:* Faced with poor domestic grain crops and tight supplies
throughout Europe, Portuguese grain traders are scrambling to find
alternative supplies. One of these is sorghum. Although sorghum has
hardly been used in the past by the Portuguese feed industry, traders
have purchased U.S. sorghum to mix in feed rations; some 27,000 tons are
due to arrive shortly.

**PO3025** \| [View the Acrobat
version](http://www.fas.usda.gov/gainfiles/200312/146085302.pdf) \| [Download
the MS Word
version](http://www.fas.usda.gov/gainfiles/200312/146085302.doc)

**Nov 25 2003 \| EU-15** \| **EU Commission adopts regulation allowing
US greater access to wheat quotas**

*Highlight:* The European Commission has adopted an amendment to the low
and medium wheat import quota system that enables the U.S. and Canada to
use part of the quota previously reserved for other third countries.
Roughly 1.4 MMT of additional quota for 2003 will now be available for
these two countries\' exports to the EU. November 24th is the earliest
possible date for bidding for quotas.

**E23221** \| [View the Acrobat
version](http://www.fas.usda.gov/gainfiles/200311/146085175.pdf) \| [Download
the MS Word
version](http://www.fas.usda.gov/gainfiles/200311/146085175.doc)

[^1]: The figures for wheat in this report follow the standard FAS
    definition of wheat to include wheat, durum wheat, wheat flour,
    semolina and several types of pasta.