|
|
|
|
|
|
JULY 1997
This reports includes the weather briefs, production briefs, and commodity feature articles from the full World Agricultural Production circular, with the exception of some of the statistical tables and charts. This report draws on information from USDA's global network of agricultural attaches and counselors, official statistics of foreign governments, other foreign source materials, and results of office analysis. Estimates of U.S. acreage, yield, and production are from the USDA Agricultural Statistics Board, except where noted. This report is based on unrounded data; numbers may not add to totals because of rounding. The report reflects official USDA estimates released in the World Agricultural Supply Estimates (WASDE-328) July 11, 1997.
The report was prepared by the Production Estimates and Crop Assessment Division, FAS, AGBOX 1045, 14th and Independence Ave., Washington, DC 20250-1045. Further information may be obtained by writing to the division, or by calling (202) 720-0888, 9516, or by FAX (202) 720-8880.
We plan to issue PART 2 of this circular every month, normally 5 working days AFTER the release of Part 1. The next issue of World Agricultural Production, Part 1, will be available electronically after 3:30 pm local time on August 13, 1997.
During May 1997, light, scattered showers frequently occurred across the main winter grain areas, resulting in near- to above-normal rainfall for the month at many locations. The moisture was beneficial for germination, but only partly corrected long-term moisture deficits in the southeast.
During the first week of June 1997, beneficial rain covered Western Australia's winter grain belt, conditioning topsoils for establishment. In the east, rainfall was generally light and scattered, although moderate showers fell over crop areas of South Australia and coastal Victoria. The northern growing areas of South Australia and southern New South Wales were too dry.
During June 8 - 14, scattered, mostly light, showers covered Australia's primary winter grain regions, sustaining topsoil moisture for germination and early development. Locally-heavy showers dotted locations along the west and southeast coasts.
From June 15 - 21, generally cool, dry weather dominated the main agricultural areas of Australia. In the east, critically dry sections of the southeastern winter grain belt received just a few millimeters of precipitation. Planting was reportedly stalled in some locations due to lack of rain. A drying trend also continued in northeastern growing areas. Scattered, light showers covered winter grain areas of Western Australia.
During June 22 - 28, beneficial rain covered most winter wheat areas of New South Wales. However, only light rain fell from southernmost crop areas of New South Wales westward to South Australia.
During June 29 through July 5, beneficial showers swept across Western Australia's winter grain belt, increasing topsoil moisture for crop establishment. Dry, cool weather dominated the east, however, with the best concentration of rain limited to northernmost winter grain regions in southern Queensland. Farther south, heavy rains east of the Dividing Range were unable to reach crops in New South Wales or Victoria. Under present conditions, July rainfall will be critical not only for crop establishment but for the completion of fieldwork.
During May 1997, rainfall averaged greater than 200 percent of normal across Shandong and Manchuria. Rainfall averaged near-normal elsewhere, except for Zhejiang where 40 to 60 percent of normal rainfall was reported. Usually, rainfall during June across the North China Plain increases from about 10 millimeters per week early in the month to 25 to 30 millimeters per week by the end of the month.
During the first week of June 1997, light to moderate rain covered the North China Plain, favoring vegetative summer crops. That week, light to widespread rain covered Manchuria, benefitting spring wheat, corn, and soybeans. Showers also blanketed the Yangtze Valley and southern China, maintaining adequate moisture supplies. During June 8 - 14, warmer, drier weather favored winter wheat harvesting across the North China Plain -- but reduced soil moisture for summer crops. Rainfall was confined to southern Shandong, Henan, Anhui, and Jianqsu. Light rain fell across southern Manchuria but heavier amounts were reported in Heilongjiang and central and eastern Jilin. Widespread showers again covered the Yangtze Valley and southern China.
During June 15 - 21, hot and mostly dry weather in the North China Plain, stressed rainfed summer crops but favored winter wheat harvesting. Light to moderate rain covered Manchuria, offsetting above-normal temperatures. Showers maintained moisture supplies for rice across the Yangtze Valley and southern China. Locally heavy showers caused isolated flooding in the southern province of Guangdong.
During June 22 - 28, favorably cooler weather eased stress on summer crops across the North China Plain. Light to moderate rain increased topsoil moisture but was still below normal for the end of June. In Manchuria, mostly dry weather prevailed across the southern crop areas which have been tending dry during the prior 2 to 3 weeks. The northern areas received 10 to 40 millimeters, favoring summer crops. Moderate to heavy showers continued to maintain favorable moisture supplies for early double-crop rice across southern China. Heavier showers likely cause some flooding across portions of Guangdong and Fujian.
From June 29 through July 5, widespread, timely rain fell across the North China Plain, benefitting vegetative summer crops. Heavier rain was reported across the southern portion of the North China Plain, boosting irrigation supplies. Beneficial rain covered most of Manchuria, but western Jilin received less than 10 millimeters and is becoming somewhat dry. Widespread showers blanketed central and southern China, maintaining abundant moisture supplies for rice but slowing early double-crop rice harvesting. Excessive rainfall caused local flooding in Hubei and Guangdong. Mostly dry, hot weather returned to the North China Plain during the week of July 6-12, increasing stress on summer crops. Widespread rain is needed to maintain average yield prospects.
The southwest monsoon was behind schedule in its early season progress. During the week of June 1-7, this was evident from the mid-latitude storm track that brought unseasonable rain to Gujarat and kept temperatures well below normal across much of northern India and Pakistan.
During June 8 - 14, beneficial showers throughout India's southern interior improved grain, oilseed, and cotton planting prospects. Heavier rain was concentrated along sections of the southwest coast, flooding rice. The rainfall across the south was associated with the southwest monsoon, which showed signs of northward progress despite the erratic nature of the overall circulation pattern. Temperatures remained near to below normal, although highs reached the low 40's C everywhere but in the south and east.
During June 15 - 21, the monsoon continued its northward progress, bringing beneficial showers to a large section of the soybean belt in west-central India. However, Gujarat, an important groundnut and cotton producer, was generally hot and dry, precluding planting. In southern India, very heavy rain continued along the southwest coast but dryness covered sections of the southern interior. Unseasonable heat in Andhra Pradesh, another important groundnut and cotton area, reduced topsoil moisture for planting. Elsewhere, beneficial rain continued throughout major rice areas of the east as well as patchy locations across the north. While rain that week in the east spread into rainfed rice areas of Orissa, much of east-central India's rainfed cropland awaited planting rains.
From June 22 - 28, heavy rain soaked primary crop areas in the western Indian state of Gujarat. While causing some localized flooding and possibly washing out recently planted crops such as cotton, the moisture was needed for groundnut planting. Seasonably heavy rain also fell along India's west coast, but farther inland, moderate showers were patchy at best throughout India's southern interior. Hot dry weather persisted over large sections of Andhra Pradesh, impeding summer crop planting. In central India, mostly dry weather favored soybean planting after the prior week's rain. Farther east, heavy rain covered a stretch of rainfed rice from eastern Madhya Pradesh to West Bengal, an area that the monsoon rains had previously skipped.
During the June 29 through July 5, widespread, locally heavy showers covered a large part of central and eastern India. Despite localized flooding, the rain maintained generally favorable moisture levels for coarse grains, oilseeds, cotton, and rice. Very heavy rain continued to inundate the southwest coast. To the north, however, drier weather brought some relief to primary groundnut and cotton areas in Gujarat. Moderate showers benefitted crops in the southern interior, including oilseed, grain, and cotton areas of Andhra Pradesh that had been tending dry. The monsoon's northern progress generated light, scattered showers over much of Pakistan and north-central India, with significant rain reaching as far northwest as Rajasthan. The monsoon typically reaches northern India and Pakistan by mid-July.
Mid-month (June) above-normal temperatures brought an end to the 10-week cool spell that slowed crop development and hindered planting activities in the Eastern United States. Flooding and ponding in the Ohio and Tennessee Valleys delayed planting and caused farmers to re-plant low- lying fields. Soybean planting progressed ahead of normal in most other areas. Widespread rain and high heat units after mid-month helped corn and soybeans to develop rapidly throughout the Corn Belt. Weed control was a concern as rains limited spraying, and cool, wet soils prevented cultivating early in the month. Average height of the corn acreage varied widely between early- and late-planted fields.
Winter wheat harvest was hampered by damp weather and progressed behind normal for most of June. The harvest started slowly in Kansas, Oklahoma, and Texas as frequent rains kept combines out of fields. Drier weather late in the month favored harvesting. The persistent cool, wet weather was an ongoing concern for farmers in the Tennessee and Ohio Valleys.
Dry soils in the northern Plains stressed both winter wheat and newly emerged spring grains. North Dakota soils were the driest in early June since 1988. Despite late plantings, spring grains emerged ahead of the normal pace until lack of moisture slowed development. However, rain during the last half of June, eased stress across the region. Above- average precipitation combined with mountain snowpack runoff flooded low-lying fields in Idaho and Montana, but provided favorable conditions for small grain development.
Growing conditions in the Southwest were ideal as a 7-week hot spell ended at mid-month. Cotton developed well ahead of average in Arizona and California. In Texas and the Southeast, cotton planting and development were slowed by unseasonably cool, wet weather. Rice development and peanut planting were also hampered by the cool, wet weather. Sorghum planting finished just ahead of the normal pace across the United States.
In western crop areas, above-normal precipitation and mild weather in June benefitted crops in Russia, most of Ukraine, Belarus, and the Baltics. In June, winter grains were filling in Ukraine, Moldova, and southern Russia (southern portion of the central Black Soils Region, lower Volga Valley, and North Caucasus), while farther north, crops advanced through reproduction in northern Russia (Northwest Region, Central Region, Volga Vyatsk and the middle and upper Volga Valley), Belarus, and the Baltics. Spring grains likely advanced through reproduction in Ukraine and southern Russia and by month's end approached the heading stage in areas farther north. Corn, sunflowers, and sugar beets were in the vegetative stage. Although temperatures in June averaged near normal in Ukraine, southern Russia, Belarus, and the Baltics, there was a period of unseasonably warm weather from June 9-11 when temperatures were 3 to 6 degrees C above normal. Highest temperatures (32 - 35 degrees C) occurred in the Volga Valley, where soil moisture was adequate to ensure normal crop development. Since early July, frequent showers and mild weather maintained favorable moisture conditions for crops in most areas. Locally heavy rain in southern Ukraine and North Caucasus likely interrupted early winter grain harvesting and caused some crop lodging.
In crop areas east of the Volga Valley, near- to above-normal precipitation in June in most of Russia maintained favorable moisture for spring grains in the vegetative stage. The exception was in the Altay Kray region in Western Siberia where below-normal precipitation and periodic hot weather lowered soil moisture. In Kazakstan, above- normal precipitation favored spring grains in primary growing areas in the north-central portion of the country. However, below-normal precipitation and periodic heat prevailed over western and eastern areas, increasing stress on crops in the vegetative stage. Since early July, soaking rain in primary spring grain areas in Kazakstan was timely for spring grains, in or nearing reproduction. In Russia, light showers in the Urals and Western Siberia maintained favorable moisture conditions for spring grains, approaching the heading stage. The exception was in the Altay Kray region in Western Siberia, where lingering dryness and hot weather increased stress on crops. Tom Puterbaugh 720-2012 (July 1997).
World cotton production for 1997/98 is projected at 86.9 million bales, 1.1 million bales lower than the 88.1 million estimated for 1996/97. For the 1996/97 season, China, India, and Pakistan had mixed results during their growing seasons. This is in contrast to the 1995/96 season when these countries had more favorable weather and reduced disease and pest problems resulting in a record crop for India and large crops for China and Pakistan. These countries pushed total world production to 92.4 million bales in 1995/96, the largest crop since 1991/92 when cotton production hit a record of 95.7 million bales. The 1995/96 crop propelled ending-stocks to the highest level since 1991/92. As a result, more-than-adequate stock levels have caused world cotton prices to continue their decline from 1994/95.
Although cotton price have strengthened in recent months, the average cotton A-Index from August 1996 through June 1997 remained 8 cents per pound lower than for the same period a year earlier. Lower prices in the spring of 1997 reduced area planted to cotton in several northern hemisphere countries.
United States: Cotton production is forecast at 18.0 million bales, down 0.9 million or 5 percent from 1996/97. As of early July, squaring was 67 percent complete, but was behind the 77 percent figure from last year and the five-year average of 70 percent. Fourteen percent of the crop was setting bolls, compared with 24 percent in 1996 and 20 percent for the five-year average. In Louisianna, only 12 percent of the crop was setting bolls. Overall, the nation's cotton crop was rated mostly good to fair. Forecast harvested area for 1997/98 at 5.2 million hectares was nearly unchanged from last year. A return to trend from last year's near-record yield would result in lower output projections.
China: Cotton production for 1997/98 is projected at 17.0 million bales, down 2.3 million or 12 percent from last year. Cotton area is forecast at 4.5 million hectares, down 5 percent from last season and the lowest planted area since 1986. The area decline continues a downward trend that began in 1995. Farmers have reduced cotton area for several reasons, including higher labor and production costs compared to other crops such as grains, fruits and vegetables; chronic problems with bollworm infestation; and Government policies that have promoted grain production. Farmers have been discouraged by stagnant cotton prices and tight Government controls on the cotton industry. However, cotton area continues to increase in the western province of Xinjiang where the soils and climate are well suited to cotton cultivation. Over the years, cotton procurement prices have risen to the point where current domestic cotton prices are 25 percent higher than the international price. This has encouraged China's textile industries to import foreign cotton and use more synthetic fibers. As a result, stock levels have risen in recent years creating a heavy financial burden for the Chinese Government.
India: After climbing to a record level last year, cotton production is expected to drop to 12.0 million bales as weak 1996/97 cotton prices are likely to result in lower area planted for 1997/98. The price relationship between competing crops has influenced 1997/98 planting decisions. Cotton prices were unusually low during the first part of the marketing period but they have strengthened in recent months. Nevertheless, area is expected to shift as farmers switch to more profitable crops such as rice in Punjab and tobacco and chillies in Andhra Pradesh and Karnataka. This area shift is expected to be partially offset by increased area in the states of Haryana, Rajasthjan, and the central Indian states where cotton is expected to gain at the expense of sugarcane.
Pakistan: Cotton output for 1997/98 is estimated at 7.7 million bales, 0.4 million bales above last year's pest-reduced crop. An area similar to the 1996/97 level of 3.2 million hectares is likely as domestic seed- cotton and lint prices are comparable to the international market. Strong demand by the textile industry under Pakistan's new free-trade scenario is also supporting bullish domestic prices. To assure a continued large cotton area, the Government has assured growers that irrigation canal closures will be avoided in the cotton producing areas. Also, the planned wide-scale distribution of new insect and virus- resistant varieties in 1997/98 will help maintain cotton area at the 1996/97 level.
Turkey: Cotton production is estimated at 3.5 million bales, slightly higher than last year as a return to a more normal production season is anticipated. Last year, yield and quality of the crop was reduced by unusually heavy rains during the harvest period. Current high domestic lint prices have dampened the expected shift away from cotton in the Aegean and Cukurova growing regions. Cotton production in these regions is anticipated to decline in the future with the cotton expansion in the Southeast Anatolia holding cotton area stable.
Australia: Cotton production is forecast at 2.8 million bales, unchanged from last year's record crop. The 1997/98 crop area is forecast to increase 3 percent, to 0.42 million hectares. This small increase and the 36 percent increase in area in 1996/97 reflect the fact that cotton is one of the most profitable irrigated crops in Australia. Despite recent dryness associated with El Nino, reservoirs in the cotton-growing areas of Australia are quite full due to ample rains in 1996 and early 1997, and water allocations should be adequate for an irrigated area similar to that of last year.
Argentina: Cotton production for 1997/98 is forecast at 1.9 million bales, up 0.4 million from last year and near the record 1.93 million bale 1995/96 crop. The production estimate is based on anticipated recovery of planted area and yields. Last year's crop suffered from serious weather problems throughout the season, causing area losses and reductions in yield. Argentine farmers have until mid-October to sow cotton, leaving producers a wide window for planting decisions. If international cotton prices are attractive in the ensuing months, planted area may rise significantly.
Brazil: Cotton production is forecast at 1.6 million bales, up 23 percent due to increased area in the Central-South region as farmers respond to the current strong cotton price and state incentives to plant more cotton. Although yield is projected higher for 1997/98, over half of the growth in output will come from a 12-percent increase in area. The recovery in cotton area is due to the governments' Summer Crop Plan. Under the plan, growers will be eligible for government loans. Other reasons which help explain this recovery include investments in harvesters and gins, improvement in seed varieties, and joint efforts by the textile industry and growers to find ways to boost production.
Egypt: Cotton production is estimated at 1.5 million bales, down 0.2 million from 1996/97, as area is down 12 percent from last year. The decrease reflects the negative response of farmers dealing with the government agencies that buy their cotton. Many farmers reportedly have not been fully paid for the cotton they sold to the government last year. In addition, the increased profitability of other crops, such as rice and wheat, has persuaded many farmers to turn away from cotton.
Mexico: Cotton production is estimated at 0.9 million bales, down 0.2 million or 20 percent from last year. A combination of low international prices, lack of government production incentives, tight credit and the high cost of financing have moved land out of cotton and into alternative crops. Farmers are pressuring the government to implement some sort of subsidy program other than PROCAMPO ( Program of Direct Aid to the Countryside). Under this program the farmer receives a direct payment per hectare. Farmers are not satisfied with this program and are planting more corn, wheat, and chickpeas--which provide better profits.
Paraguay: Cotton production for 1997/98 is forecast at 0.5 million bales, well above last year's level of 0.2 million bales. The primary factors influencing the improved outlook for the cotton sector are the expected increased profitability and government influence on policy and markets. Paraguay's political forces recognize the potential social impacts of the recent decline in production on the rural economy and are proposing several laws and supportive programs to aid cotton producers.
TABLE 20
WORLD COTTON AREA, YIELD, AND PRODUCTION Year Harvested Area Yield Production
(1,000 Ha) (Kg/Ha) (1,000 Bales*)
1987/88 30,863 572 81,095 1988/89 33,817 544 84,423 1989/90 31,567 550 79,745 1990/91 33,171 571 87,016 1991/92 34,820 598 95,681 1992/93 32,631 550 82,484 1993/94 30,694 544 76,719 1994/95 32,157 579 85,520 1995/96 35,944 560 92,409 1996/97 p 33,705 569 88,053
5-yr. avg. 33,026 561 85,037 1997/98 f 33,506 565 86,911
*480-pound bales p = preliminary f = forecast
Ronald R. Roberson, Cotton Chairperson
Phone: (202) 720-0879 E-mail: roberson@fas.usda.gov
Foreign Agricultural Service analysts from USDA/Washington, D.C., traveled to the Philippines, Indonesia, and Malaysia during May and June 1997 to assess the copra and palm oil industries. The team met with government officials, traders, investors, and producers to better understand the current limitations on palm oil and copra production in these countries.
Palm oil production in Southeast Asia is increasing by substantial amounts, but subtle factors are at work which will cause future expansion to be less than uniform throughout the region. Copra production, on the other hand, has remained fairly level during the last decade.
Philippines: The Philippines is the world's largest producer of copra, the dried fleshy portion of coconut which is pressed for oil. Copra production is estimated at 2.30 million tons for 1996/97, up from 1.97 million in 1995/96, but down from a record 2.65 million in 1994/95. In the Philippines, coconut production has numerous advantages over palm oil production. There are fewer climatic and logistical reasons limiting locations where coconut palms can be grown and the trees are more tolerant to an extended dry season than oil palms which are most often grown within 5 degrees latitude of the equator. Additionally, copra can be dried locally and has a longer period before it must be pressed to extract the oil. Most palm oil plantations require fresh fruit bunches to be delivered to the pressing plant and processed within 24 -- 48 hours of harvesting.
The Philippines currently has measures underway to maintain the industry and keep it competitive. To help maintain the viability of the copra industry, the Government enacted the Coconut Tree Preservation Act. Under this law, landowners must be receive permission from the Philippine Coconut Authority to remove any coconut palm. Generally, removal is authorized for trees greater than 60 years old, the age at which the trees are no longer considered economical. The Coconut Authority also has a coconut palm breeding program which has 11 hybrids available for use. Yields from these hybrids are reportedly as high as 4 tons per hectare compared with 1 ton for traditional selections.
On-farm drying facilities are being promoted to improve coconut oil clarity and reduce levels of aflatoxin which tend to occur using the more traditional method of sun drying copra. One particular drying facility, a Cocopugon, is rather simple in that it is a covered box which contains the drying copra, with a firebox beneath. However, to be economical it requires 20 hectares of palm trees, while many coconut palm holdings in the Philippines are smaller. Small producers are encouraged to use plastic sheeting for their sun drying activities.
Coconut palms are commonly used for lumber in the Philippines because of a scarcity of forests. The lumber value of a coconut palm to the farmer is roughly 500 pesos (US$19) per tree or roughly US$2,500 per hectare. This is as much revenue as can be obtained from copra in five years. Since lumber is a valuable by-product of copra production, there is the temptation for producers to sell the trees when immediate cash needs arise, thus halting copra production.
Only 50 to 60 percent of coconut production in the Philippines is used in copra production. Approximately 30 percent of coconuts are harvested while still immature for coconut water, which is canned and sold as an increasingly-popular refreshment beverage. Desiccated coconut is also an important product for the Philippine coconut industry.
Talks are underway between the Philippine Government and investors to develop oil palm plantations on southern Mindanao. The Government has identified 300,000 hectares as suitable for palm oil production; however, a number of problems remain for development. Large tracts of land required by oil palm plantations can not be assembled easily, and current policy restricting land use will have to be changed. In addition, separatist rebel activity hinders development of the proposed region.
Indonesia: Indonesia, like the Philippines, is a major producer of copra. Production has increased 15 percent in the last 10 years, from 1.27 million tons in 1986/87 to an estimated 1.46 million in 1996/97. However, it is the current rapid expansion of the palm oil industry which is most notable. Many involved in the industry, both in Indonesia and Malaysia, believe Indonesia will overtake Malaysia in palm oil production by 2010.
Sources estimate that there are currently 1.6 million hectares planted to oil palm, with an additional 4.0 million hectares allocated for expansion. Most of the development of new oil palm plantations in Indonesia are being carried out by domestic or Malaysian companies, although companies from other countries are also involved.
Because of the concern about the large Malaysian influence in the domestic palm oil industry, on March 1, 1997, the Indonesian Government issued an edict suspending licensing of foreign capital investment for development of oil palm estates. Reportedly, the injunction is not permanent but will temporarily halt foreign investments in this area.
The traditional area for palm oil production in Indonesia is in North Sumatra Province which is west of the palm oil producing areas on peninsular Malaysia. Currently, 87 percent of national oil palm area is on Sumatra, with 37 percent located in North Samatra. Future areas of expansion often mentioned are West Sumatra, Kalimantan (Indonesian part of the island of Borneo), Sulawesi, and Irian Jaya (the Indonesian portion of the island of New Guinea). Expansion of planted area in Kalimantan is currently occurring rapidly, but development in Irian Jaya is being hampered by a lack of infrastructure. As area expansion has proceeded rapidly, so has seed production; however, the availability of improved seed may be limiting the expansion of production. There have been allegations that some unimproved seed has been misrepresented and packaged as improved seed. Since oil-palm trees do not begin producing until 3.5 years after planting, it would be at least that long before a tree's deficiencies became apparent.
Currently there is only one field production hybrid, "Tenera", available in both Indonesia and Malaysia. The hybrid is produced by crossing the parent lines Dura and Pacifera. Other hybrids are being tested by a number of institutions at a number of locations but none has yet been released. Cloning of elite selections is being used heavily in the replication of experimental selections, but production of clones is not yet sufficient for field production.
Oil palms are planted in triangles with trees typically spaced 9.0 meters apart resulting in a density of about 135 trees per hectare. The fruit, weighing roughly 100 grams, is produced in 20 to 30 kilogram bunches. The fruit is stripped from the bunch leaving a fibrous rachis called an "empty fruit bunch". Two commercial uses have been developed for these empty bunches. On some plantations they are dried and packaged as potting soil, on others they are partially burnt and sold as charcoal.
The fruit bunches grow among the fronds near the top of oil palms and no way has been found to economically harvest the fruit bunches except by hand. A curved knife blade on the end of a pole is used to trim away some of the palm fronds and then to cut the stem of the fruit bunch, allowing the fruit bunch to fall to the ground. In the process, some of the fruit having the highest oil content is knocked from the fruit bunch and must be manually picked off the ground, otherwise production and oil yield decline. Plantations require 2.6 workers per hectare, including the crushing plant and management. As a consequence, in areas where labor is less available or more expensive, palm oil production is less attractive.
Malaysia: Economic development has come rapidly to Malaysia, and, as a consequence, oil palm expansion may be limited due to labor shortages. Nevertheless, the Malaysian Ministry of Primary Industries expects production to expand to 10 million tons by the year 2000, an increase of 16 percent from an estimated 8.6 million in 1996/97. Area is expected to increase from the current 2.6 million hectares to 3.0 million by the year 2000.
One sign of a domestic labor shortage in Malaysia is the presence of foreign workers. Foreign labor in palm oil production may be as high as 30 percent and illegal immigration is considered a problem. The shortage of domestic labor also is blamed for the low crude palm oil extraction rate which is about 19 percent in Malaysia compared with the 22 to 23 percent achieved in Indonesia. Another limitation on the expansion of palm oil production in peninsular Malaysia is a shortage of suitable land. Recently a 15 by 25 kilometer area of oil palm was set aside as a high-tech industrial park.
The eastern Malaysian states of Sabah and Sarawak still have large land areas available for expansion, but they limit/restrict immigration and land use. Laborers which might come from west Malaysia, the Philippines, Indonesia, or elsewhere are kept out by restrictive immigration policies. The states of Sabah and Sarawak have considerable autonomy and persons arriving from the peninsula as well as foreign countries must go through immigration checks. In addition, "Natural Right" land use policies, meant to protect the native populations, limit the development of new plantations on Sarawak.
Malaysian Government policies, including tax policies, have been established to support external investment. The oleochemical industry is expanding, and as a result, Malaysia may serve as a center for processing of palm oil produced throughout the region. Examples of palm oil products are cosmetics, alcohols, glycerine, and products for the chocolate industry.
Research relating to the production of palm oil in Malaysia is similar in many ways to that in Indonesia. The government organization for oil- palm research is the Malaysian Palm Oil Research Institute. It has a plant breeding program where alternative hybrids are researched, but as of yet the hybrid "Tenera" is still the only field production hybrid available. Cloning is used to propagate elite planting material but is not being for general field production. Private seed suppliers are also involved in cloning and researching alternative hybrids.
Demand is another factor which may limit expansion of palm oil production. Higher-than-expected production since April and slackening demand resulted in increasing stock levels in recent months. Anticipation of larger crude-palm oil (CPO) output in the coming months and weaker overseas demand resulted in a downtrend in CPO prices on the Kuala Lumpur Commodity Exchange. The average monthly CPO price for June was RM 1,212 per ton compared to RM 1,315 in May. However, producers who were interviewed believe that prices at their current levels are high enough to be profitable.
TABLE 21
COPRA PRODUCTION IN SELECTED COUNTRIES (1,000 Metric Tons)
Year Philippines Malaysia Indonesia
1983/84 1,237 214 1,225 1984/85 1,813 166 1,260 1985/86 2,500 162 1,250 1986/87 2,100 97 1,270 1987/88 1,826 97 1,250 1988/89 1,650 97 1,245 1989/90 2,313 115 1,320 1990/91 2,006 80 1,310 1991/92 1,934 82 1,325 1992/93 2,221 62 1,190 1993/94 1,937 58 1,465 1994/95 2,652 19 1,285 1995/96 1,970 23 1,460 1996/97 2,300 20 1,460 1997/98 2,300 20 1,480
TABLE 22
PALM OIL PRODUCTION IN SELECTED COUNTRIES (1,000 Metric Tons)
Year Philippines Malaysia Indonesia
1983/84 12 3,324 1,150 1984/85 17 3,817 1,185 1985/86 22 4,772 1,280 1986/87 30 4,560 1,300 1987/88 16 4,852 1,370 1988/89 18 5,636 1,700 1989/90 23 6,412 2,250 1990/91 35 6,031 2,650 1991/92 30 6,222 2,750 1992/93 38 7,125 3,250 1993/94 38 7,100 3,900 1994/95 38 7,771 4,250 1995/96 40 8,260 4,500 1996/97 40 8,700 4,950 1997/98 f 40 8,800 5,400
Paul Provance, Regional Analyst
Phone: (202) 720-0882 E-mail: provance@fas.usda.gov
South America is forecast to produce a record 46.1 million tons of soybeans in 1997/98, up 10 percent from last year's record production of 41.7 tons, and up 42 percent since 1988/89. Area is forecast at a record 20.9 million hectares, up 6 percent from last year and up 21 percent from ten years ago. All four of the largest soybean producers in South America--Brazil, Argentina, Paraguay, and Bolivia--are expecting record production. As a region, South America is second only to the United States in soybean production and is forecast to produce 32 percent of the world's soybeans in 1997/98.
Brazil: Brazil is the largest soybean producer in South America and the world's second-largest producer after the United States. Soybean production during 1997/98 is forecast at 28.0 million tons, up 6 percent from last year's record crop. Area is forecast at 12.6 million hectares, a 7-percent increase from 1996/97, while yields are projected slightly above average. Soybean area in the Center-West and South is forecast to increase 3 to 10 percent. Increased area is expected due to four major factors. Firstly, 63 percent more funding is available to finance soybean planting loans at annual interest rates which have fallen from 12 to 9.5 percent. Secondly, producers received high prices for the MY 1997 soybean crop. Thirdly, growers have increased their purchases of inputs and agricultural machinery. The fertilizer industry, for example, expects sales to go up 7 to 10 percent this year, and herbicide sales are expected to grow 15 percent. And last, the transportation infrastructure has improved. Continued improvements and growth of the Northern Corridor transportation system (soybean exports via the Madeira and Amazon Rivers) will stimulate soybean plantings in northern and northeastern Brazil.
Brazilian soybean farmers closely watch international soybean prices and will increase planting if prices increase. If prices decline by September when they begin to plant, area may then decline. Another factor which may inhibit increases in area planted is the level of the scheduled credit payment in October. Also, farmers must meet certain qualifications for loans to reschedule their debt. Some farmers, especially in Mato Grosso, who traditionally accrue more debt because of the larger farm size of 600,000 hectares, may not qualify.
Planting begins as early as September and continues through January. Most of the soybean crop is planted from mid-October through December. Soybeans are grown in nearly all of Brazil's states, but the largest soybean-producing states are Parana, Mato Grosso, and Rio Grande do Sul, which typically account for 24, 21, and 20 percent of production, respectively.
Argentina: Argentina is South America's second-largest soybean producer and the fourth-largest producer in the world. Soybean production for 1997/98 is forecast at a record 13.9 million tons, up 21 percent from last year's drought-reduced crop. Argentina is one of the largest producers and exporters of soybeans, soybean meal, and soy oil. Area is forecast at a record 6.3 million hectares for 1997/98--up 2 percent or 0.1 million hectares. Higher soybean prices have encouraged more area.
In Argentina, soybean planting begins in November and continues through January. Although soybeans are grown throughout Argentina, they are concentrated in Santa Fe, Buenos Aires, and Cordoba Provinces where an estimated 92 percent of all soybeans are produced. Soybeans are grown in rotation with corn, sorghum, sunflower, pasture, and wheat. Often the rotations are set patterns, hindering farmers from making purely economic decisions about which crop to plant.
Soybeans are planted after wheat (double-cropped soybeans) in the rich- soil regions of northern Buenos Aires and southern Santa Fe. Double- cropped area is estimated to be 37 percent of soybean area, down significantly from 1996/97 levels. Farmers had increased double-cropped soybeans last year in response to the dramatic increase in wheat area in 1996/97, but dryness in March and April of 1997 severely affected yields for the late-planted soybeans. Yields are forecast above average due to the increase of single-crop soybeans in 1997/98.
The Argentine economy has changed significantly over the last several years, moving toward market-oriented economic policies with an emphasis on deregulation, decentralization, and privatization. The high costs of transportation, port delays, and inputs are lower than what they had been previously, but higher than in competing countries. High production costs are especially difficult for Argentina's soybean producers, whose income is derived from dollar-denominated international markets while costs are in pesos.
Paraguay: Paraguay has the third-largest soybean output in South America, producing 6 percent of South America's soybeans; it is the sixth-largest producer in the world, tying Canada. In 1997/98, Paraguay is forecast to exceed last year's record production of 2.7 million tons of soybeans by 4 percent. Production has increased in recent years due to expanded area and changes in Paraguay's monetary and export policies to favor agricultural exports. Soybean output has increased 67 percent since 1988/89. The potential for further area expansion exists in the fertile, forested areas of the southeast. Area is forecast at a record 1.25 million hectares, up 4 percent from last year and up 47 percent from 10 years ago.
Soybean planting begins in October and continues through December. The harvest season extends from April through June. Soybeans are grown primarily in eastern and southern Paraguay (east of the Paraguay River) where the climate, topography, and soils are similar to the Brazilian soybean growing areas of western Parana and Rio Grande do Sul.
The outlook for Paraguayan soybean production in 1997/98 is positive because of high international prices. Also, the favorable harvest last year has improved farmers' financial situation. Soybean production in Paraguay is more susceptible to vagaries in the weather than production in Brazil or Argentina because soybean area is concentrated in one place. Hot, dry weather at flowering can greatly affect yields, especially if planting is delayed by dry weather or credit limitations.
Bolivia: Bolivia is South America's fourth-largest soybean producer, accounting for 3 percent of South American production. Production for 1997/98 is forecast at 1.26 million tons, up 26 percent from last year's record of 1.0 million. Area for 1997/98 is forecast at a record 630,000 hectares, up 15 percent from last year. Soybean production has been growing rapidly over the last 10 years and is expected to increase in the future, albeit at a slower pace. Economic incentives favor continued expansion of soybean area. Soybeans are a non-traditional agricultural product and are aided by international development loans designed to expand exports. Subsidized transportation costs and a 10-percent rebate for exports of non-traditional products encourages production. An underdeveloped transportation infrastructure and the lack of available capital limit expansion.
Soybeans are the principal oilseed grown in Bolivia and nearly all are grown in the Santa Cruz region, east of the Andes. The tropical wet and dry climate allows for two harvests. The wet season crop accounts for 80 to 85 percent of production. Planting begins in November and, harvesting begins in April. For the smaller dry-season crop, planting begins in May or June and harvesting runs from September through October.
Robert Tetrault, Regional Analyst
Phone: (202) 690-0140 E-mail: tetrault@fas.usda.gov
|
|