Required Report - public distribution

**Date:** 2/10/2004

**GAIN Report Number:** SF4004

SF4004

**South Africa, Republic of**

**Grain and Feed**

**Annual Report**

**2004**

**Approved by:**

![](media/image1.wmf)Scott Reynolds

U.S. Embassy, South Africa

**Prepared by:**

Herman Germishuis

**Report Highlights:**

South Africa\'s 2003 corn crop is currently estimated at 6.6 million
tons compared to the 9.7 million tons produced in 2002. The decrease is
the cumulative effect of a cutback in area planted and a summer drought.
This will lead to imports of more than a million tons in 2004. South
Africa\'s 2003 wheat crop is currently estimated at 1.4 million tons
after 2.4 millionn tons were produced in 2002. My 2003/04 imports are
likely to reach 1.2 million tons after 870,000 tons were imported in the
previous season. If weather conditions allow, the 2004 crops planted
later this year are expected to rebound to previous levels.

Includes PSD Changes: Yes

Includes Trade Matrix: No

Annual Report

Pretoria \[SF1\]

\[SF\]

# Summary {#summary-1}

South Africa's, current, 2003 corn and wheat crops have both been
severely damaged by drought. This was on top of severe cutbacks in the
area planted mainly due to poor price prospects. The total area planted
to corn dropped from 3.65 million hectares in 2002 to 2.95 million
hectares in 2003. The 2003 crop is currently only expected to yield
about 6.6 million tons, after 9.7 million tons were produced in 2002. As
a result 2004 import needs are expected to jump to about 1.1 million
tons compared to the 200,000 tons estimate for the current season. The
demand is for yellow corn, mainly from Argentina, who is able to comply
with South Africa's GMO requirements. For the 2004 crop to be planted
from October this year, we see the area planted increase again to about
3.5 million hectares allowing a 9 million tons plus crop if weather
conditions are favorable. Because of the run down in stocks we still
foresee a healthy import demand in 2005.

South Africa's 2003 wheat crop is currently estimated at 1.4 million
tons after 2.4 million tons were produced in 2002. The decrease is
mainly due to a 193,000 hectares cutback in area planted, and a drop in
average yield. South Africa took advantage of the market and imported
870,000 tons in 2002/03, which created a 900,000 tons carry over. The
big carry over helped cut back 2003/04 import needs to 1.2 million tons.
About 300,000 tons is re-exported annually. For the 2004 crop to be
planted from May this year we foresee a return to a bigger area planted
allowing for a much better crop. Imports will still stay high in 2005.

www.sagis.org.za

[www.grainsa.co.za]{.underline}

[www.safex.co.za]{.underline}

[www.fews.net]{.underline}

[www.wfp.org]{.underline}

[www.grains.org](http://www.grains.org/)

+----------------+-------+--------+-------+--------+-------+--------+
| **Country**    | **So  | ##     |       |        |       |        |
|                | uth** | #####  |       |        |       |        |
|                |       | Africa |       |        |       |        |
+----------------+-------+--------+-------+--------+-------+--------+
| **Commodity**  | **C   |        |       |        |       |        |
|                | orn** |        |       |        |       |        |
+----------------+-------+--------+-------+--------+-------+--------+
| '000 Hectare   | 2002  | R      | 2003  | Es     | 2004  | Fo     |
|                |       | evised |       | timate |       | recast |
+----------------+-------+--------+-------+--------+-------+--------+
| '000 Metric    | USDA  | Post   | USDA  | Post   | USDA  | Post   |
| ton            | Off   | Es     | Off   | Es     | Off   | Es     |
|                | icial | timate | icial | timate | icial | timate |
|                |       |        |       |        |       |        |
|                | \[    | \      | \[    | \      | \[    | \      |
|                | Old\] | [New\] | Old\] | [New\] | Old\] | [New\] |
+----------------+-------+--------+-------+--------+-------+--------+
| **Market Year  |       | 0      |       | 0      |       | 0      |
| Begin**        |       | 5/2003 |       | 5/2004 |       | 5/2005 |
+----------------+-------+--------+-------+--------+-------+--------+
| Area Harvested | 3650  | 3650   | 3100  | 2950   | 0     | 3500   |
+----------------+-------+--------+-------+--------+-------+--------+
| Beginning      | 1943  | 1945   | 1868  | 2000   | 618   | 200    |
| Stocks         |       |        |       |        |       |        |
+----------------+-------+--------+-------+--------+-------+--------+
| Production     | 9675  | 9675   | 8000  | 6600   | 0     | 9300   |
+----------------+-------+--------+-------+--------+-------+--------+
| TOTAL Mkt. Yr. | 100   | 200    | 450   | 1100   | 0     | 1000   |
| Imports        |       |        |       |        |       |        |
+----------------+-------+--------+-------+--------+-------+--------+
| Oct-Sep        | 617   | 617    | 150   | 750    | 0     | 950    |
| Imports        |       |        |       |        |       |        |
+----------------+-------+--------+-------+--------+-------+--------+
| Oct-Sep Import | 21    | 21     | 0     | 0      | 0     | 0      |
| U.S.           |       |        |       |        |       |        |
+----------------+-------+--------+-------+--------+-------+--------+
| TOTAL SUPPLY   | 11718 | 11820  | 10318 | 9700   | 618   | 10500  |
+----------------+-------+--------+-------+--------+-------+--------+
| TOTAL Mkt. Yr. | 1200  | 1200   | 1000  | 1000   | 0     | 1000   |
| Exports        |       |        |       |        |       |        |
+----------------+-------+--------+-------+--------+-------+--------+
| Oct-Sep        | 1141  | 1141   | 1000  | 850    | 0     | 950    |
| Exports        |       |        |       |        |       |        |
+----------------+-------+--------+-------+--------+-------+--------+
| Feed Dom.      | 4100  | 4050   | 4100  | 3950   | 0     | 3950   |
| Consumption    |       |        |       |        |       |        |
+----------------+-------+--------+-------+--------+-------+--------+
| TOTAL Dom.     | 8650  | 8620   | 8700  | 8500   | 0     | 8500   |
| Consumption    |       |        |       |        |       |        |
+----------------+-------+--------+-------+--------+-------+--------+
| Ending Stocks  | 1868  | 2000   | 618   | 200    | 0     | 1000   |
+----------------+-------+--------+-------+--------+-------+--------+
| TOTAL          | 11718 | 11820  | 10318 | 9700   | 0     | 10500  |
| DISTRIBUTION   |       |        |       |        |       |        |
+----------------+-------+--------+-------+--------+-------+--------+

**Production**

The National Crop Estimates Committee released its preliminary
commercial area planted estimate for summer crops for the 2003/04 season
on January 20, 2004. The area planted to corn is estimated at 2.6
million hectares, nearly 20% down on the 3.2 million hectares planted in
2002. This is the lowest area planted since 1939. Farmer's initial
intention was to cut back the area by 12% for economic reasons; the
additional 8% cutback was due to the November/December drought. The
ratio of white to yellow corn plantings is 65:35. The area planted to
white corn is 1.67 million hectares, down 25.4% from the previous
season's 2.23 million hectares, while the yellow corn plantings are
estimated at 892,000 hectares, down 6.4% from 952,500 hectares last
year. It is unlikely that the area planted increased much after the mid
January estimate as the summer solstice was on December 21 and one would
prefer not to plant much after mid summer. Later plantings were probably
for fodder. In the eastern areas the first frost could be expected by
April 15 limiting the length of the growing season.

Forecasting production is even more difficult as weather conditions are,
and have been, very poor. Soil moisture was low after a long, dry,
winter and early spring rains also disappointed.

November and December rainfall was under normal while good rains only
arrived in mid January. Rainfall has also been very patchy while
temperatures have been above normal. Unfortunately South Africa's summer
grain growing areas are not homogenous but have different soils and
microclimate areas, making forecasting difficult. To forecast the 2003
crop we have to look at what happened over the past five seasons. The
following table contains the average for the past five seasons after
commercial crop estimates were adjusted based on deliveries and farm
retentions.

South Africa, Corn production on commercial farms:

  ----------------- ----------------- ----------------- -----------------
  5 year average    Area '000 ha.     Yield Mt./ha.     Production '000
                                                        mt.

  White             1900              2.9               5500

  Yellow            1100              3.2               3500

  Total             3000              3.0               9000
  ----------------- ----------------- ----------------- -----------------

  ----------------- ----------------- ----------------- -----------------
  2003 Forecast     Area '000 ha.     Yield Mt./ha.     Production '000
                                                        mt.

  White             1666              2.4               4000

  Yellow            892               2.7               2400

  Total             2558              2.5               6400
  ----------------- ----------------- ----------------- -----------------

The 2003 area planted could have produced a 7.7 million ton crop at
average yields, which means that the area cutback is the reason for a
1.3 million ton or 14.5% drop in expected production. The lower yield
expected caused another 1.3 million ton or 14.5% reduction in the
expected crop for a total decrease of 2.6 million ton or 29% on the five
year average. This forecast is based on normal weather for the rest of
the season.

For the 2004 crop, to be planted from October this year, it can be
assumed that farmers will return to their previous planting patterns.
The main reason for this assumption is that stocks will be low after the
2004/05 marketing year, and farmers will be encouraged by the higher

prices. As usual, we base our predictions on normal weather.

The following table contains the 2003 and 2004 crop forecasts including
small-scale production:

  -------------- -------------- -------------- -------------- --------------
  CORN           FAS 03         MY 04/05       FAS 04         MY 05/06

                 Area '000 ha.  Prod. '000 mt. Area '000 ha.  Prod. '000 mt.

  Commercial     2558           6400           3000           9000

  Small scale    392            200            500            300

  Total          2950           6600           3500           9300
  -------------- -------------- -------------- -------------- --------------

**Consumption**

Commercial deliveries, that is corn delivered to the silos according to
the South African Grain Information Service (SAGIS), forms the basis of
the commercial PS&D. Corn produced and consumed outside the formal
trading environment is not well documented. To correlate the commercial
PS&D with a specific crop we use the March to February deliveries and
not the formal May to April marketing year. The March and April
deliveries are then deducted from the May 1 carry over and added to the
new season's deliveries.

The most recent commercial PS&D's are summarized below:

  ----------------- ----------------- ----------------- -----------------
  FAS 2001          My 2002/03 final                    

  '000 Metric tons  White corn        Yellow corn       Total corn

  B/stocks          325               340               665

  Deliveries        5360              3725              9085

  Imports           275               650               925

  Commercial supply 5960              4715              10675

  Exports, whole    745               325               1070
  grain                                                 

  Dom.              3950              3710              7660
  disappearance                                         

  Ending stocks     1265              680               1945

  FAS 2002 est.     My 2003/04                          

  '000 Metric tons  White             Yellow            Total corn

  Beginning stocks  1265              680               1945

  Delivery est.     6250              2750              9000

  Imports           0                 200               200

  Total Supply      7515              3630              11145

  Exports           1100              100               1200

  Dom.              4515\*            3430              7945
  Disappearance                                         

  Ending stocks     1900              100               2000
  ----------------- ----------------- ----------------- -----------------

\* Including an additional 300,000 tons of white corn used for feed.

  ------------------- ----------------- ----------------- -----------------
  FAS 2003 forecast   My 2004/05                          

  '000 Metric tons    White             Yellow            Total

  B/Stocks            1900              100               2000

  Crop est.           4000              2400              6400

  Deliveries          3900              2000              5900

  Imports             0                 1100              1100

  Total supply        5800              3200              9000

  Exports             950               50                1000

  Dom.Disappearance   4450\*            3350              7800

  Ending stocks       400               -200\*\*\*        200
  ------------------- ----------------- ----------------- -----------------

\* Including an additional 300,000 tons of white corn used for feed,
otherwise sales would be closer to 4150 white and 3650 yellow to total
7800.

\*\* Negative stock situation to be covered by early deliveries from the
next crop, or additional imports.

  ----------------- ----------------- ----------------- -----------------
  FAS 2004 Model    MY 2005/06                          

  '000 Metric tons  White             Yellow            Total

  B/Stocks          400               -200              200

  Crop forecast     5500              3500              9000

  Deliveries        5400              3200              8600

  Imports           0                 1000              1000

  Total Supply      5800              4000              9800

  Exports           950               50                1000

  Dom.              4150              3650              7800
  Disappearance                                         

  E/Stocks          700               300               1000
  ----------------- ----------------- ----------------- -----------------

Doubts about the prospects for the 2003 crop is clearly illustrated in
the following table where white corn prices increased by 54% and yellow
corn prices by 47.4% over the past three months.

  -------------- -------------- -------------- -------------- --------------
  Futures prices March 2004     May 2004       July 2004      September 2004

  White corn/mt.                                              

  10/31/2003     R939 =         R964 =         R980 =         N/a
                 \$135.50       \$139.10       \$141.40       

  11/28/2003     R931 =         R956 =         R968 =         N/a
                 \$141.50       \$145.30       \$147.10       

  12/30/2003     R1155 =        R1174 =        R1190 =        R1219 =\$184.7
                 \$175.0        \$177.9        \$180.3        

  01/29/04       R1442 =        R1467 =        R1500 =        R1518 =
                 \$209.9        \$213.5        \$218.3        \$221.0

  Yellow                                                      
  corn/mt.                                                    

  10/31          R961 =\$138.7  R988 = \$142.6 R974 =\$140.5  N/a

  11/28          R987 =\$150.0  R965 = \$146.7 R956 =\$145.3  N/a

  12/30          R1175 =\$178.0 R1162 =\$176.0 R1135 =        R1135 =\$172.0
                                               \$172.0        

  01/29          R1418 =        R1370 =        R1346 =        R1371 =\$199.6
                 \$206.4        \$199.4        \$195.9        

  Wheat/mt.                                                   

  10/31          R1696 =\$244.7 R1732 =\$249.9 R1760 =\$254.0 N/a

  11/28          R1623 =\$246.7 R1651 =\$250.9 R1655 =\$251.5 N/a

  12/30          R1598 =\$242.1 R1633 =\$247.4 R1649 =\$249.8 N/a

  01/29          R1740 =\$253.3 R1760 =\$256.2 R1782 =\$259.4 N/a
  -------------- -------------- -------------- -------------- --------------

# 

The price variations, to a certain extend, also reflect the very strong
South African Rand. The yellow corn price, quite justifiably, is moving
toward import parity. This is currently about R1195/mt. for corn from
Argentina and R1223/ton for US corn, at the coast. The R135/ton
transport cost between the coast and Randfontein, where local prices are
set, are not included.

###### Trade

Unfortunately the CY 2003 trade data are not yet available for the trade
matrices but we will submit these as soon as they become available.

Exports:

For the nine months between May 2003 and the end of January 2004, South
Africa exported 800,000 tons of white and 97,000 tons of yellow corn,
for a total of 897,000 tons, or about 100,000 tons per month. Exports to
Customs Union Partners, the so-called BLNS countries amounted to about
329,000 tons or 36,500 tons per month. Normal BLNS sales are estimated
to be about 40,000 tons per month. Total My 2003/04 sales are expected
to reach about 1.2 million tons.

In addition to the BLNS sales, some other regional sales are also
foreseen for 2004 pushing the 2004/05 seasonal total to about one
million tons.

The following table contains the export details: May 2003 to end January
2004

  ----------------- ----------------- ----------------- -----------------
  Exports by        White Corn        Yellow Corn       Total, Metric
  Country                                               tons

  Zimbabwe          330 419           16 281            346 700

  Zambia            6 829             0                 6 829

  Mozambique        66 807            5 818             72 625

  Namibia           67 249            14 812            82 061

  Botswana          116 017           1 801             117 818

  Swaziland         18 554            21 732            40 286

  Lesotho           83 208            5 531             88 739

  Angola            14 834            0                 14 834

  Kenya             48 150            0                 48 150

  Congo             225               0                 225

  Tanzania          22 912            0                 22 912

  Senegal           0                 2 600             2 600

  Madagascar        10 357            2 024             12 381

  Cape Verde        14 153            14 687            28 840

  Japan             0                 10 374            10 374

  Mauritius         0                 1 333             1 333

  Comoros           0                 15                15

  Total             799 714           97 008            896 722
  ----------------- ----------------- ----------------- -----------------

Imports

A severe shortage of yellow corn is developing in Southern Africa. Since
May 2003 South Africa has imported about 59,000 tons of yellow corn but
this pace is expected to jump to about 50,000 per month over the next
few months for a My 2003/04 total of about 200,000 tons. The crunch is
coming in the new, My 2004/05 season, when yellow corn import needs
could jump to about 1.1 million tons, or nearly 100,000 tons per month.
The model for the 2004 crop indicates that the shortage may continue
well into 2005/06. Coupled to the anticipated monthly need of 100,000
tons of wheat, (see Wheat section) and the corn and

wheat exports, pressure on the transport sector is increasing.

# Stocks

The official marketing year runs from May to April, but the table below
clearly illustrates the recent tendency of early deliveries to increase.
It amounted to 120,000 tons in March and April 2001 but increased to
about 740,000 tons 2002 and 760,000 tons in 2003. This was mainly due to
irrigated production and early seasons. Including the new seasons'
deliveries in the carry over stocks creates confusion as some analysts
were adding the whole new season crop estimate and thus double counting
the early deliveries. We have adjusted the series over time while
awaiting a change to the official marketing year.

  ----------------- ----------------- ----------------- -----------------
  Carry Over Stocks White             Yellow            Total, '000
  l                                                     metric ton

  May 1, 2001       1273              842               2115

  Less deliveries,  28                46                74
  April                                                 

  March             20                26                46

  Old season stocks 1225              770               1995

                                                        

  May 1, 2002       559               643               1202

  Less deliveries,  232               306               538
  April                                                 

  March             75                128               203

  Old season stocks 252               209               461

  Rounded           250               210               460

                                                        

  May 1, 2003       1718              992               2710

  Less deliveries,  292               224               516
  April                                                 

  March             159               88                247

  Old season stocks 1267              680               1947

  Rounded           1265              680               1945
  ----------------- ----------------- ----------------- -----------------

**Policy**

The import tariff on corn is only R16.50/ton, or \$2.35/ton at R7 to the
U.S. Dollar and trade is free. The Government is considering
implementing a strategic grain reserve to curb excessive price
movements, but at the moment the strong Rand and weak Dollar are keeping
prices in check. The latest import parity calculations are:

  ----------------- ----------------- ----------------- -----------------
  2004/01/30        HRW #2 Wheat,     Argentina corn    US \# 3 Y corn,
                    Gulf                                Gulf

  FOB value, March  \$164.43          \$115.00          \$120.96

  Freight           \$35.00           \$35.00           \$35.00

  C.I.F.            \$199.92          \$150.35          \$156.32

  Rand/ton          R1399.02          R1052.13          R1093.91

  Financing         R13.22            R9.94             R10.34

  Discharging       R92.02            R92.02            R92.02

  Import tariff     0                 R16.50            R16.50

  F.O.R. Durban     R1504.26          R1170.59          R1212.77

  Local prices,     R1785             R1431 Y/R1469 W   
  inland                                                
  ----------------- ----------------- ----------------- -----------------

Local prices are set at Randfontein from where railage to Durban is
R135/ton and about R185/ton to the Cape. Corn can thus be imported
cheaper in the coastal areas.

South Africa allows the production of genetically modified crops under
controlled conditions. Only certain events are registered for use on
corn. They are Bt11, Bt 176, Cry1F, Mon810, Mon810+Nk603, MonGA21,
Nk603, T25. Imports are thus restricted to corn only including these
events, effectively barring US corn from the market.

+----------------+-------+--------+-------+--------+-------+--------+
| **Country**    | **So  | #      |       |        |       |        |
|                | uth** | #####  |       |        |       |        |
|                |       | Africa |       |        |       |        |
+----------------+-------+--------+-------+--------+-------+--------+
| **Commodity**  | **Wh  |        |       |        |       |        |
|                | eat** |        |       |        |       |        |
+----------------+-------+--------+-------+--------+-------+--------+
| '000 ha.       | 2002  | R      | 2003  | Es     | 2004  | Fo     |
|                |       | evised |       | timate |       | recast |
+----------------+-------+--------+-------+--------+-------+--------+
| '000 mt.       | USDA  | Post   | USDA  | Post   | USDA  | Post   |
|                | Off   | Es     | Off   | Es     | Off   | Es     |
|                | icial | timate | icial | timate | icial | timate |
|                |       |        |       |        |       |        |
|                | \[    | \      | \[    | \      | \[    | \      |
|                | Old\] | [New\] | Old\] | [New\] | Old\] | [New\] |
+----------------+-------+--------+-------+--------+-------+--------+
| **Market Year  |       | 1      |       | 1      |       | 1      |
| Begin**        |       | 0/2002 |       | 0/2003 |       | 0/2004 |
+----------------+-------+--------+-------+--------+-------+--------+
| Area Harvested | 941   | 941    | 748   | 748    | 0     | 900    |
+----------------+-------+--------+-------+--------+-------+--------+
| Beginning      | 587   | 588    | 898   | 897    | 723   | 550    |
| Stocks         |       |        |       |        |       |        |
+----------------+-------+--------+-------+--------+-------+--------+
| Production     | 2320  | 2387   | 1475  | 1428   | 0     | 2100   |
+----------------+-------+--------+-------+--------+-------+--------+
| TOTAL Mkt. Yr. | 871   | 870    | 1200  | 1200   | 0     | 900    |
| Imports        |       |        |       |        |       |        |
+----------------+-------+--------+-------+--------+-------+--------+
| Jul-Jun        | 1024  | 1018   | 1200  | 1200   | 0     | 85     |
| Imports        |       |        |       |        |       |        |
+----------------+-------+--------+-------+--------+-------+--------+
| Jul-Jun Import | 63    | 63     | 0     | 600    | 0     | 0      |
| U.S.           |       |        |       |        |       |        |
+----------------+-------+--------+-------+--------+-------+--------+
| TOTAL SUPPLY   | 3778  | 3845   | 3573  | 3525   | 723   | 3550   |
+----------------+-------+--------+-------+--------+-------+--------+
| TOTAL Mkt. Yr. | 310   | 310    | 200   | 320    | 0     | 325    |
| Exports        |       |        |       |        |       |        |
+----------------+-------+--------+-------+--------+-------+--------+
| Jul-Jun        | 331   | 328    | 200   | 320    | 0     | 300    |
| Exports        |       |        |       |        |       |        |
+----------------+-------+--------+-------+--------+-------+--------+
| Feed Dom.      | 10    | 12     | 10    | 10     | 0     | 10     |
| Consumption    |       |        |       |        |       |        |
+----------------+-------+--------+-------+--------+-------+--------+
| TOTAL Dom.     | 2570  | 2638   | 2650  | 2655   | 0     | 2665   |
| Consumption    |       |        |       |        |       |        |
+----------------+-------+--------+-------+--------+-------+--------+
| Ending Stocks  | 898   | 897    | 723   | 550    | 0     | 560    |
+----------------+-------+--------+-------+--------+-------+--------+
| TOTAL          | 3778  | 3845   | 3573  | 3525   | 0     | 3550   |
| DISTRIBUTION   |       |        |       |        |       |        |
+----------------+-------+--------+-------+--------+-------+--------+

# Production

According to the sixth production estimate, the 2003 wheat crop is
estimated at 1.428 million tons, compared to the 2.39 million tons
produced in 2002. The main reason for the decline is a 20.5% cutback in
area planted, due to dry conditions at planting from May 2003,
especially in the Free State. The November/December 2003 drought further
damaged the crop.

The 2004 crop, to be planted from May this year, is facing a similar
predicament. All indications are that soil moisture in the Free State,
the main spring wheat area, will again be low after the current dry, hot
summer. On the other hand there is a big area lying fallow, which has
not been planted to summer or winter crops, and farmers may decide to
increase the area planted to wheat again. The following table highlights
the recent production history and our 2004 forecast.

  ----------------- ----------------- ----------------- -----------------
  Year of planting  Area, '000 ha.    Yield, Mt./ha     Production, '000
                                                        mt.

  2000              934               2.60              2428

  2001              959               2.60              2493

  2002              941               2.62              2387

  2003 Estimate     748               1.91              1428

  2004 Forecast     900               2.33              2100
  ----------------- ----------------- ----------------- -----------------

**Consumption**

Commercial consumption amounted to 2.606 million tons in 2001/02 and
2.626 million tons in 2002/03. Current indications are that the
consumption rate has picked up since October 2003 and consumption for
the year is estimated at 2.645 million tons, which could increase to
2.655 million tons in 2004/05 if current high corn prices continue.

# Trade

South Africa acts as a conduit for wheat trade in the region, but has
recently developed as a net importer of wheat. The following table
highlights the recent wheat trade situation.

  ----------------- ----------------- ----------------- -----------------
  Imports           For South Africa  For the Region    Total, '000 mt.

  MY 2001/02        407               156               563

  My 2002/03        747               123               870

  Oct. 03 to Jan.                                       
  04                                                    

  From USA          183               79                262

  Canada            0                 14                14

  Germany           12                4                 16

  UK                22                0                 22

  Australia         69                0                 69

  Argentina         8                 2                 10

  Total             294               98                392

  Est. total for                                        1200
  season                                                

  Forecast for                                          900
  2004/05                                               

                                                        
  ----------------- ----------------- ----------------- -----------------

The 2004 import demand will be especially high as a result of the
smaller crop. Since the beginning of October up to January 31 about
392,000 tons were imported at about 98,000 tons per month. To move the
anticipated local and regional import demand of about 1,200,000 tons for
the season, the rate will have to be pushed up to more than 100,000 tons
per month. Currently the U.S. share of the trade is about 66% and this
could continue through the season leading to U.S. sales reaching 600,000
to 800,000 tons. Fortunately there is no import duty on wheat.