September/
October 1998
Wheat 
World News
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Prairie Grains is the
official publication of
the Minnesota
Association of
Wheat Growers,
North Dakota Grain
Growers Association,
South Dakota Wheat,
Inc., and the
Minnesota Barley
Growers Association.
Bruce Hamnes, Stephen, MN, was installed as 1998-99 secretary-treasurer of USW at the organization's summer board of directors meeting in Omaha, Neb., August 2-4.
Jerry Kress, an Idaho wheat producer, was installed as USW's new chairman. "Slow exports are one of the reasons wheat prices are so low. Our organization's major goal this year will be to try to get wheat exports back on track, especially to Asia," Kress says.
Other wheat producers installed as USW 1998-99 officers were: Chris Shaffer, Walla Walla, Wash., vice chairman; and Dan Gerdes, Johnson, Neb., past chairman.
US wheat export sales increase in 1998/98
US wheat exports in the 1997/98 marketing year ending May 31 increased 5.6% over 1996/97, primarily due to a very large increase in sales to Egypt and sales of 817,400 metric tons (mt) to Iraq. US wheat export sales totaled 27.52 million metric tons (mmt) or 1.01 billion bushels in 1997/98, according to the end of year U.S. Export Sales Report issued by USDA's Foreign Agriculture Service (FAS). The U.S. also exported 773,300 mt in concessionary sales through programs such as USDA's P.L.-480 program.
"The increase over sales of 25.96 mmt in 1996/97 also can at least be partially attributed to the fact that the US was generally price competitive for much of the marketing year," says US Wheat Associates (USW) Chairman Dan Gerdes.
Egypt leading buyer
Egypt was the leading buyer of US wheat in 1997/98, purchasing 4.98 mmt, a significant increase over the 2.83 mmt it bought from the US last year. According to USW Middle Eastern/East African Regional Director Dick Prior, a variety of reasons can be attributed to the large increase, including that last year imports by Egypt were below normal levels. See the chart below for the rest of the top 10 US wheat buyers in 1997/98.
Iraq joins list of leading US buyers
Iraq joined the leading list of US wheat buyers this year due to the United Nations Oil-for-Food program and was the fourth leading buyer of hard red winter wheat. The sales marked the first time Iraq has bought US wheat since the 1989/90 marketing year. Significant buyers missing this year from last year's top 10 list were China and Brazil. China purchased just 379,800 mt, compared to 1.06 mmt in 1996/97, the lowest purchase level from the US in many years. Matt Weimar, USW Regional Vice President for China/Hong Kong, attributes the decrease to yet another large Chinese wheat crop, and consequently decreased imports (only two mmt), and the impasse on the TCK issue. The TCK issue also put a stop to any wheat sales to Brazil in 1997/98, however, Brazil and the US are working to resolve concerns about TCK, a wheat disease, and other pests.
Former Soviet Union continues as non-player
In terms of world regions, the European Union substantially increased its imports of US wheat, with imports increasing 36%, from 835,000 mt in 1996/97 to 1.3 mmt in 1997/98. Meanwhile, the Former Soviet Union continues to be a non-player in the world wheat market, importing just 275,300 mt, similar to the previous year's level. U.S. wheat sales to both Japan and Taiwan increased slightly in 1997/98. Both countries continue to be steady, reliable buyers of US wheat.
Algerian purchase of US wheat follows trade mission
Algeria recently purchased 75,000 metric tons of US wheat, the first time it has purchased US wheat since August 1997. US wheat sales have been constrained by lack of Algerian interest in credit programs and aggressive pricing by Argentine and European suppliers. The recent purchase comes on the heels of a USW trade mission to the US, which included Moatassem Bouchemha, the Algerian government Cereals Office buyer, who visited the Northern Plains during his US visit.
Indonesia buys US wheat
Indonesia purchased 100,000 tons of U.S. dark northern spring in May, the first purchases of US wheat by the fourth most populated country in the world in some time. The two 50,000 ton purchases, scheduled for shipment this summer, were secured under the GSM credit guarantee program offered by USDA. USW/Singapore has actively worked with USDA to promote utilization of the credit program in order to capture sales to this economically troubled country.
USW urges action on trade sanctions
USW adopted a policy statement opposing the use of unilateral trade sanctions due to their negative effect on wheat exports during USW's summer board of directors meeting in Omaha, Neb., August 2-4.
The new USW policy statement says that US wheat export prospects are seriously limited because several growing markets are closed to commercial US wheat exports. These markets include Cuba, Iran, Iraq, Libya and North Korea, where wheat imports collectively totaled 11.2 mmt in 1998/99, representing 15% of total world wheat trade. The 1998/99 figure is more than double the 5.3 mmt imported by the five countries in 1995/96.
According to the USDA-FAS, this is the largest percent of global wheat trade from which the US has been excluded since the then Soviet Union 1980 wheat embargo.
"U.S. sanctions have prevented American wheat farmers from access to very sizeable markets for long periods of time," USW Chairman Jerry Kress says. "These include long-standing prohibitions against selling wheat to Iran and Cuba. Iran was once one of the U.S.' largest wheat customers, while Cuba represents a very large opportunity just off our shore."
The statement includes the following suggested principles regarding U.S. sanctions policy: other than the case of war or for national security reasons, the U.S. should refrain from the use of unilateral sanctions; food, food products, medicine and medical supplies, including financing, should be exempted from existing and prospective sanctions; all current sanctions should be subject to economic analysis and review; Executive Branch embargoes of U.S. agricultural commodities and products should be subject to review by Congress; and compensation should be provided to U.S. producers whose exports and income are hurt due to the imposition of unilateral sanctions or embargoes.
Pakistan makes large US wheat purchase following vote to restore farm credits
Pakistan announced plans in July to purchase 300,000 metric tons (mt) of US wheat, following fast action by Congress to exempt government farm guarantees of commercial credit sales to Pakistan and India from sanctions recently issued against the two countries.
All US wheat sales in recent years to Pakistan have been sold through use of GSM-102 export credit guarantees. A Pakistan embassy official informed USW that it decided to increase the portion purchased from the US as a gesture of appreciation for US wheat farmers' efforts to remain a reliable supplier to Pakistan. USW was instrumental in helping to resolve this issue by working with USDA, members of Congress and others to help ensure continued shipments of U.S. wheat to Pakistan.
USW web site
Check out U.S. Wheat Associates' web site, where you will find web versions of USW's newsletters and other publications, including U.S. Wheat Export News, Wheat World, the WheatLetter as well as other wheat export related information. n