The following GAIN reports were released on October 15, 2021.
Post maintains its estimates for marketing year 2020/2021 (MY20/21) paddy area and production at 3,265 thousand hectares (THA) and 9.48 million metric tons (MMT). Despite reported droughts and floods in some parts of the country, industry sources expect higher production of the MY21/22 main wet season crop. Post maintains its MY21/22 forecasts of paddy production at 3,310THA and 9.61MMT, higher than the previous year. Weaker exports to the European Union and other major markets were offset by gains in China and Vietnam in the first eight months of MY20/21. Post raised its MY20/21 export estimate to 1.60MMT, which is higher than the USDA official number. Post revised its MY21/22 export forecast to 1.41MMT on a slight increase in official trade and lower cross-border trade.
On August 6, 2021, the Government of Ethiopia (GOE) announced a revised edition of the customs tariff book. The revised tariff book includes over 8,000 tariff line items for raw materials, intermediate, consumer-oriented, and capital goods. The GOE intends to achieve two main objectives by applying the revised tariffs on imports. First, the GOE aspires to enhance the competitiveness of domestic producers by imposing a higher duty on similar goods locally produced in sufficient quantity and quality. Second, the GOE intends to support local producers who import raw materials, which are unavailable domestically, at low tariffs. The GOE also amended the customs tariff to align with its ten-year economic development plan. In addition, Ethiopia envisages harmonizing its tariff book with that of the World Customs Organization (WCO). The tariff amendment, combined with other trade measures and policy reforms, could accelerate the country's integration into regional and global trading systems.
The revised EU27 sugar production forecast for market year (MY) 2021/22 is 16.6 million metric tons (MMT) in Raw Sugar Equivalents (RSE) as it suffered less from beet yellows virus (BYV) disease than the MY 2020/21 production. However, it remained 450,000 metric tons (MT) below the MY 2019/20 production. The EU27 sugar consumption for MY 2021/22 is forecast to remain below pre-COVID-19 levels at 16.9 MMT, up from 16.7 MMT in MY 2020/21, as the EU food industry is embarking on a program to reduce sugar contents in food products by 10 percent by 2025. The EU27 sugar imports in MY 2021/22 are forecast at 2 MMT, but high world sugar prices caused them to drop to 1.5 MMT in MY 2020/21. EU27 sugar exports for MY 2021/22 are forecast up to 1.3 MMT RSE, with MY 2020/21 exports performing better than anticipated and only 200,000 MT below MY 2019/20.
FAS Mumbai (Post) forecasts marketing year (MY) 2021/2022 cotton production at 28 million 480 lb. bales on an area of 12.4 million hectares. Planted area fell by nearly 5 percent compared to last year, but yields are expected to improve to 492 kilograms per hectare. MY 2021/22 mill consumption is forecast to increase to 26 million 480 lb. bales thanks to strong export demand for cotton yarn and textile products. Demand for raw cotton exports remains firm as Indian fiber prices are very competitive in global markets.
Mexico is the world's 15th largest economy and Latin America's second largest. In 2020, Mexico experienced its worst economic downturn since 1932, mainly due to the COVID-19 pandemic. Despite the economic headwinds, 2020 U.S. agricultural and related-product exports to Mexico reached $18.9 billion, a 1.6 percent increase over 2019. Mexico ranked as the world's seventh most-visited country in 2020, as the Government of Mexico (GOM) continued to allow international tourists. Nonetheless, Mexico's hotel, restaurant, and institutional (HRI) industries were negatively affected by the pandemic, with numerous hotel closures and over 120,000 restaurants closures. The HRI sectors are currently recovering, and Post expects continued progress in 2022 due to evolving Mexican and international vaccine protocols and COVID mitigation strategies.
Following an exceptional milk production year in 2021 (and especially the first half of the year), FAS/Wellington is forecasting milk production to fall slightly in 2022. New Zealand's milk production is forecast at 22.25 million metric tons (MMT), 0.5 percent less than the record-breaking volume in 2021. If realized this level would be more in line with recent growth trends, and it assumes normal weather patterns. Milk production for 2021 is now estimated at 22.37 MMT, 1.8 percent above 2020. The volume may have even been higher except cooler and overcast weather during the spring (August/September) impacted pasture growth, reducing potential production in the second half of the year. Farm gate milk prices remain strong in New Zealand, and exports have also been robust, especially to China.
Domestic milk production is forecast to stay steady at just over 2 million tons in 2022. 2021 milk production is projected to drop to 2.03 million tons after reaching 2.88 million tons in 2020. Milk production in 2020 benefited from favorable weather and higher price expectations. At the same time, COVID-19 related school closures resulted in weaker fluid milk demand. The resulting imbalance fueled higher dried milk production and larger dried milk stocks.
Export prices of white and parboiled rice increased one percent as the Thai baht strengthened against the U.S. dollar.
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