Agricultural Baseline Projections: Global Agricultural Trade, 2009-2018

Overview Summary of Projections Macroeconomic Assumptions U.S. Crops U.S. Livestock U.S. Agricultural Sector Measures Global Agricultural Trade Recommended Readings Recommended Data USDA Baseline Process Questions and Answers

Global economic growth slows during the beginning of the 2009-18 projection period, but recovers after 2010 and remains slightly above the historical average long-term growth rate during the last half of the period. This renewed growth provides a foundation for gains in world demand for agricultural products. Although the expansion in global biofuels production slows in the projections, it also adds to global demand for agricultural commodities.

Developing countries are the main source of growth in world demand and trade. Food consumption and feed use are particularly responsive to income growth in those countries, with movement away from staple foods and increased diversification of diets. Demand from developing countries is further reinforced by population growth rates that remain nearly twice that of developed countries.

Developing countries account for more than two-thirds of the projected increase in world meat imports. Generally, middle-income countries with increasing per capita incomes are expected to have the most rapid growth. However, large increases in poultry and beef imports are projected for Africa and the Middle East. Strong policy support for domestically produced meat is expected to motivate growth in feed grain imports in regions where limited land availability or agroclimatic conditions preclude expanding domestic crop production.

World consumption of aggregate grains and oilseeds exceeded production in 7 of the past 8 years. As a result, global stocks dropped sharply. Crop prices rose dramatically between 2003 and 2008. In response, world crop area for 2008 crops increased sharply and favorable weather caused world production of grains and oilseeds to jump nearly 5 percent. Although prices have plummeted since mid-2008, they are projected to remain above pre-2007 levels in the coming decade.

World agricultural production rises in response to high prices and technology enhancements. However, limited ability to expand planted area in many countries and slowing global productivity gains constrain production growth and raise uncertainties about future supply response.

Traditional exporters of a wide range of agricultural commodities, such as Argentina, Australia, Canada, the European Union (EU), and the United States, remain important in the coming decade. But countries that are making significant investments in their agricultural sectors, including Brazil, Russia, Ukraine, and Kazakhstan, are expected to have an increasing presence in export markets for basic agricultural commodities.

Global trade in soybeans and soybean products has risen rapidly since the early 1990s, and has surpassed not only wheat—the traditional leader in agricultural commodity trade—but also total coarse grains (corn, barley, sorghum, rye, oats, millet, and mixed grains). Continued strong growth in global demand for vegetable oil and protein meal, particularly in China and other Asian countries, is expected to maintain soybean and soybean-product trade well above wheat and coarse grains trade throughout the next decade.

• Production of wheat, coarse grains, and oilseeds (including soybeans) compete with each other and with other crops for limited cropland. Higher prices for vegetable oils, as a result of increased demand for food use as well as for biodiesel and other industrial uses, are bringing previously uncropped land in Brazil, Indonesia, and Malaysia into soybean and palm oil production.

• In the projections, the growth in total area planted to all crops rises less than a half-percent per year in most countries. Area expansion occurs more rapidly in countries with a reserve of available land and policies that enable farmers to respond to higher world prices. Such countries include Brazil, some other South American countries, some Eastern European countries, Russia, and Ukraine. About two-thirds of the projected growth in global production is derived from rising yields. The growth rate in crop yields has slowed somewhat during the last several decades and is projected to continue to do so.

• The impact of slowing growth in total crop production is partially offset by declining growth in world population. Nonetheless, increasing population is a significant factor driving overall growth in demand for agricultural products. Additionally, rising per capita income in many countries augments population gains in the demand for vegetable oils, meats, and horticultural products.

• In the coming decade, overall gains in global grain trade come from a broad range of countries, particularly from countries in Africa and the Middle East.

• During the projection period, world average per capita use of vegetable oils is projected to rise 12 percent, compared with 5 percent for total coarse grains and 3 percent for meat. Per capita use is projected to decline nearly 3 percent for wheat and 2 percent for rice.

Definition of country groups

Growth in wheat imports is concentrated in those developing countries where income and population gains underpin increases in demand. Important growth markets include Sub-Saharan Africa, Egypt, Pakistan, Algeria, Indonesia, the Philippines, and Brazil. World wheat trade (including flour) expands by nearly 22 million tons (18 percent) between 2009 and 2018 to 141.6 million tons.

• Egypt maintains its position as the world's largest importing country, as imports climb slowly to more than 9 million tons. Imports by Brazil, Algeria, and Indonesia are each projected to exceed 7 million tons. Brazil's climate generally does not favor wheat, and in some key wheat-producing states, winter corn is expected to provide better producer returns than wheat.

• Imports by developing countries in Sub-Saharan Africa, North Africa, and the Middle East rise 11.6 million tons and account for 53 percent of the total increase in world wheat trade. Saudi Arabia has adopted a policy to phase out wheat production subsidies by 2016 because of water scarcity concerns, and imports are projected to jump by 3 million tons by the end of the projections.

• In most developing countries, little change in per capita wheat consumption is expected but imports expand modestly because of population growth and limited potential to expand production.

• Changing consumption patterns will boost wheat imports by some major importing countries. In Indonesia, Vietnam, and some other Asian countries, strong economic growth and diversification of diets are projected to increase per capita wheat consumption.

• Lower wheat-to-corn price ratios during most of the projection period enable wheat to compete effectively with corn for feed use in a number of countries. Europe is expected to continue to account for about half of global wheat feeding.

Definition of country groups

The traditional five largest wheat-exporting nations (the United States, Australia, the EU, Argentina, and Canada) account for 70 percent of world trade in 2009-18. This is down from 89 percent in 1997/98, mostly due to increased exports from the Black Sea area. U.S. wheat exports are projected to account for less than 21 percent of global wheat trade at the end of the projection period, down from 26 percent in the past 5 years. By the end of 2007, the global stocks-to-use ratio had declined to the lowest level on record. A significant 2008/09 rebound in global production enabled stocks to jump and precipitated a decline in prices. However, after working down these larger stocks, much of it lower quality feed wheat, stocks are projected to continue to be lower than during the 1990s. Prices are projected to remain above pre-2007 average levels.

• Shares of the world wheat market held by Canada and the United States decline slightly, while shares increase for the EU, Ukraine, Russia, and Argentina.

• In Canada, increased demand for vegetable oils, especially rapeseed oil for human consumption and biodiesel production, and increasing demand for barley, are expected to reduce wheat area and limit any growth in wheat exports.

• Ukraine, Russia, and Kazakhstan have become significant wheat exporters in recent years. Low costs of production, new investment in their agricultural sectors, and generally favorable weather since 2001 have enabled their combined world market share to climb to about 20 percent in the last 3 years. Russia is expected to increase wheat production for domestic feed use. Exports from Ukraine and Russia are projected to continue gaining market share, more than offsetting a slight decline in the share held by Kazakhstan. However, because of the region's highly variable weather and yields, year-to-year volatility in production and trade can be expected.

• Wheat exports by Turkey and other smaller exporters change little or trend slowly downward during the projection period. Although India has exported some wheat in recent years, exports are expected to be minimal as domestic demand expands as fast as production.

Growth in coarse grain trade is strongly linked to expansion of livestock production in regions unable to meet their own feed needs. Key growth markets include China, Mexico, North Africa, the Middle East, and Southeast Asia. Japan and South Korea are large but mature import markets for coarse grains.

• Corn is the dominant feed grain traded in international markets. Corn accounts for an average of 75 percent of all coarse grain trade through the projection period, followed by barley (17 percent) and sorghum (5 percent).

• Commercialization of livestock feeding has been a driving force behind the growing dominance of corn in international feed grain markets. Hogs and ruminants, such as cattle and sheep, are capable of digesting a broad range of feedstuffs, making demand relatively price-sensitive across alternate feed sources. However, as pork and poultry production become increasingly commercialized, higher quality feeds are used, boosting the demand for corn and soybean meal.

• Mexico's corn imports rise throughout the projection period and sorghum imports resume growth after 2009/10. Mexico's imports of cracked corn are projected to be almost completely replaced by whole-grain corn. Cracked corn from the United States and Canada has had duty-free access to the Mexican market since 2003. However, effective January 1, 2008, Mexico ended its transitional tariff-rate quota on U.S. and Canadian corn, as part of the North American Free Trade Agreement (NAFTA). This change removed the incentive for Mexico to import cracked corn instead of whole-grain corn.

Definition of country groups

World coarse grain trade expands nearly 19 million tons (16 percent) from 2009 to 2018. The share of global coarse grain production used as animal feed declines slightly from about 63 percent in recent years to 60 percent during the projections. Industrial uses, such as starch, ethanol, and malt production, are much smaller but growing. The share of coarse grains used for food has been declining during the last decade and is projected to continue doing so.

• World grain prices have risen during the last several years as global grain stocks declined sharply. Although the higher prices are expected to continue stimulating grain production, neither stocks-to-use ratios nor prices return to levels prevailing during the last three decades.

• Steady longrun growth in the livestock sectors of developing countries in Latin America, Asia, North Africa, and the Middle East is projected to account for much of the growth in world coarse grain imports during the next decade.

• Russia is expected to produce more coarse grains for domestic feed use.

• Mexico's corn imports are projected to rise from 9.1 million tons in 2009/10 to 11.5 million in 2018. With the conclusion of NAFTA's liberalization of U.S.-Mexico corn trade, growth in Mexican corn imports will be influenced by rising feed demand from Mexico's poultry sector.

• The North Africa and the Middle East region is expected to experience continued growth in import demand for grain and protein meals through 2018 as rising populations and increasing incomes sustain strong demand growth for domestically produced animal products. In Egypt, government policy has shifted toward allowing more poultry meat imports. Still, poultry production is projected to rise, boosting corn imports more than 2 million tons.

• In Japan, South Korea, and Taiwan, increasing imports of selected meat cuts constrain meat production, resulting in no growth in coarse grain imports.

• Countries in Southeast Asia raise corn imports 1.7 million tons (32 percent) during the projection period as their increased demand for livestock products exceeds their capacity to grow more feed grains.

Definition of country groups

The United States dominates world trade in coarse grains, particularly corn. However, increasing domestic corn use for ethanol, large competing supplies of feed wheat, and reduced world trade limit U.S. corn exports at the beginning of the projection period. As stocks of feed wheat are consumed and world corn trade recovers, U.S. corn exports are projected to resume growth after declining in 2008/09. The U.S. share of world corn trade remains between 55 and 60 percent.

• Argentina, with a small domestic market, remains the world's second-largest corn exporter. Due to higher export taxes on grains, Argentina shifts some cropland from corn to soybean production and corn exports increase slowly. Argentina and other South American countries increase corn exports to Chile to support its expanding pork exports.

• The EU becomes a more competitive corn exporter. Increases in area and yields enable it to more than double shipments during the projections. Exports from other European countries are also projected to climb steadily.

• Corn exports from some countries of the former Soviet Union (FSU), primarily Ukraine, rise to nearly 5 million tons by 2018. Favorable resource endowments, increasing economic openness, and greater investment in their agricultural sectors stimulate corn production. However, efforts to increase meat production and reduce meat imports, keep exports from growing more rapidly.

• Brazil's corn exports are near record high levels during the early years of the projections. In the last several years, Brazil has targeted the EU's demand for non-genetically modified grain. This marketing opportunity is assumed to diminish as Brazil legalizes planting of genetically modified corn varieties and the EU reduces imports. Also, strong growth in domestic demand from its livestock and poultry sectors and the profitability of growing soybeans limits corn production and exports.

• China becomes a net importer of about 2 million tons of corn at the end of the projections as imports grow slowly while exports remain small. China's strengthening domestic demand is driven by its expanding livestock and industrial sectors.

Global barley trade expands 3.3 million tons (17 percent) during the projection period. Rising demand for both malting and feed barley underpin the increased trade.

• Feed barley imports by North African and Middle Eastern countries grow steadily over the next decade. In the mid-1990s, corn overtook barley as the principal coarse grain imported by these countries, due mainly to rising poultry production. This pattern is expected to continue through the projection period. However, the North Africa and Middle East region is expected to remain the world's largest barley importing area.

• Saudi Arabia—the world's foremost barley-importing country—accounts for over 35 percent of world barley trade through the coming decade. Saudi Arabia's barley imports are used primarily as feed for camels, goats, and sheep.

• Iran is another Middle East country that is projected to increase barley imports during the coming decade.

• International demand for malting barley is boosted by strong growth in beer demand in many developing countries, notably China—the world's largest malting-barley importer. China's beer demand is rising steadily due to growth in incomes and population. Expansion in China's brewing capacity is being aided by foreign investment. Australia and Canada are China's main sources of malting barley imports.

Definition of country groups

Historically, global barley exports have originated primarily from the EU, Australia, and Canada. However, Ukraine and, to a lesser extent, Russia have emerged as important competitors in international feed barley markets and remain so throughout the projection period.

• In the EU, reform of the Common Agricultural Policy abolished EU intervention for rye and stimulated the allocation of more area to barley production. EU exports to non-EU countries are projected to climb more than 30 percent to 7 million tons over the projection period, and account for 30 percent of world trade.

• The FSU remains a major barley exporter throughout the coming decade as exports remain around 6 million tons. Together, the FSU and EU account for about 60 percent of world barley exports by 2018.

• Malting barley is a different quality than feed barley and commands a substantial price premium over feed barley. This premium is expected to influence planting decisions in Canada and Australia and, in both countries, malting barley's share of total barley area is expected to rise during the projection period. An increase in Canada's total barley area offsets a decline in the area planted to wheat and minor coarse grains.

World sorghum trade, which averaged nearly 6.7 million tons during the last decade, declines to 5 million tons in the early years of the projection period before rising to 7 million tons at the end. Sorghum trade is driven mostly by U.S. exports to Mexico and Japan.

• The EU normally imports small quantities of sorghum as part of the Spain-Portugal Accession Agreement, but because of domestic and global corn production shortfalls and limited availability of nongenetically modified corn to import, it became the world's largest sorghum importer in 2007/08. EU corn production returned to normal levels in 2008 and its future imports of both corn and sorghum are projected to be modest.

• Mexico has accounted for about half of world sorghum imports until the most recent years. Mexico's sorghum imports are projected to increase to nearly 4 million tons by 2018. At this import level, Mexico again accounts for more than 50 percent of world sorghum imports.

• Japan imports a fairly constant volume of sorghum (1.3 million tons) throughout the period to maintain diversity and stability in its feed grain supplies.

• The United States is the largest exporter of sorghum, accounting for more than 80 percent of world trade in 2000-05. During the early part of the projection period, U.S. exports, and its share of world trade decline. During the latter half of the period, U.S. exports and its share of world trade recover but remain near the levels of the past two years.

• The primary sorghum markets for Argentina, the world's second largest exporter, are Japan, Chile, and Europe. In Argentina, prices and profitability are expected to favor planting soybeans and corn, so sorghum exports remain relatively flat during the projection period.

• Brazil has begun to export small quantities of sorghum and the volume is projected to rise during the projection period. In the Central-West region of Brazil, sorghum is increasingly planted during the dry season between crops of soybeans or cotton.

Strong income and population growth in developing countries generate increasing demand for vegetable oils for food consumption and for protein meals used in livestock production. Demand for vegetable oils to be used as feedstocks for biodiesel is also projected to increase. Because a number of countries prefer to import oilseeds for crushing, rather than import soybean meal or soybean oil, world trade in soybeans expands more rapidly than for soybean meal or soybean oil.

• Prices for vegetable oils rise due to increasing consumer demand in developing countries and the expansion of biodiesel production. As demand increases for vegetable oils faster than for protein meals, vegetable oil prices rise more rapidly than for oilseeds and protein meals.

• Many countries with limited opportunity to expand oilseed production continue investment in oilseed crushing capacity, such as China and some countries in North Africa, the Middle East, and South Asia. As a result, import demand for soybeans and rapeseed grows rapidly. However, strong competition in international protein meal markets is expected to shift some of the import demand from oilseeds to cheaper meals.

• China's expansion of domestic crushing capacity significantly influences the composition of world trade by raising global import demand for soybeans and other oilseeds rather than for oilseed products.

• In Argentina, uncertainties about grain policies cause farmers to shift some land to soybean production. However, future soybean expansion is constrained by slower rates of conversion of pasture land to cropland.

• Brazil's rapidly increasing soybean area enables it to gain a larger share of world soybean and soybean meal exports, despite increasing domestic feed use. Its share of world exports of soybeans plus the soybean equivalent of soybean meal rises from about 30 percent in recent years to 33 percent by 2018.

• EU rapeseed area increases early in the projections in response to the demand for rapeseed oil for biodiesel production. Only small amounts of soybean oil are used for biodiesel production.

Definition of country groups

World soybean trade is projected to rise rapidly, climbing nearly 27 million tons (33 percent) during the next decade.

• The EU was the world's leading importer of soybeans until 2002. However, increases in grain and rapeseed meal feeding and rising imports of soybean meal have resulted in declining soybean imports since then. These trends are projected to continue.

• China's soybean imports have risen sharply and now account for nearly half of world trade. China will face policy decisions regarding tradeoffs in producing or importing corn and soybeans. The projections assume that Chinese policies will support maintaining domestic corn production and importing soybeans. Thus, China accounts for more than 80 percent of the projected 27-million-ton growth in global soybean imports over the next 10 years. Significant investments in oilseed crushing infrastructure by China drive strong gains in soybean imports as China seeks to capture the value added from processing oilseeds into protein meal and vegetable oil. The use of vegetable oils for biofuels production is assumed to have a negligible impact on China's total vegetable oil use.

• East Asia's trade outlook is dominated by a continuing shift from importing feedstuffs to importing meat and other livestock products. As a result, this region's import demand for protein meal and oilseeds does not rise during the coming decade despite rising meat consumption.

• Mexico's soybean imports are projected to increase by about one-third during the projection period. These imports will support the production of soybean meal for the Mexican poultry industry and soybean oil for domestic food consumption.

• For Argentina to operate its expanding crushing facilities at full capacity, it is expected to import 5 million tons of soybeans from Brazil, Paraguay, Uruguay, and Bolivia by the end of the period.

Definition of country groups

The three leading soybean exporters—the United States, Brazil, and Argentina—have accounted for more than 90 percent of world trade in recent years. Their market share is projected to decline to slightly less than 90 percent as exports rise from other exporting countries, such as Uruguay, Paraguay, and Bolivia.

• With continuing area gains, Brazil maintains its position as the world's leading exporter of soybeans and soybean products. Combating soybean rust disease increases production costs. However, because of the increased domestic demand for soybean meal for livestock feed and soybean oil for human consumption and biodiesel production, soybeans remain more profitable than other crops in most areas of Brazil. It is assumed that some land in southern Brazil will shift from oilseed to corn production during the middle of the projection period in response to higher corn prices and more limited competition from U.S. corn exports. Still, with expanded soybean plantings in the Cerrado regions, the growth rate for Brazil's soybean planted area is projected to average more than 3.5 percent per year, reaching more than 30 million hectares by 2018. Soybean exports are projected to rise more than 80 percent.

• Argentina's export tax rates are higher for soybeans than for soybean products, which favors domestic crushing of whole seeds and exporting the products. However, in response to world demand for soybeans for crushing, Argentina's soybean exports have risen sharply and remain above 14 million tons throughout the projection period.

• Other South American countries, principally Uruguay, Paraguay, and Bolivia, expand exports nearly 50 percent to more than 10 million tons. Five million tons are destined for the crushing industry in Argentina.

• Russia and Ukraine respond to higher international market prices for oilseeds by increasing production of rapeseed and soybeans. Although rapeseed production will be most affected, Ukrainian soybean exports are projected to increase somewhat.

• In the United States, reduced soybean acreage and increased domestic crush limit exportable supplies, but their competitiveness is aided by the dollar's value remaining below the early 2000s level.

Definition of country groups

World trade in soybean meal grows briskly during the projections, rising more than 17 million tons (nearly 30 percent) by 2018. Continuing growth in the demand for livestock products, limited capability to increase oilseed production, and relatively lower world prices for protein meals boost demand for soybean meal by a number of countries with rising middle-income populations. Lower import prices for soybean meal relative to soybeans and grains provide incentives for countries to use imported soybean meal at a higher rate in livestock feed rations.

• The EU remains the world's largest destination for soybean meal throughout the projection period, despite increased domestic feeding of grains and rapeseed meal. Although there will be abundant supplies of low-cost rapeseed meal available for feed as a result of the biofuels expansion, there are technical limits on the amount of rapeseed meal that can be incorporated in livestock ratios. As a result, growth in soybean meal imports is expected to continue. Also, an increase in the dairy production quota increases soybean meal feeding.

• The regions of Southeast Asia, Latin America, and North Africa and the Middle East all become larger importers of soybean meal due to increasing demand for livestock feed in many countries.

• Mexico's strong growth in demand for protein feed and vegetable oils is projected to continue.

Definition of country groups

Argentina, Brazil, and the United States remain the three major exporters in international soybean meal markets. Together, they account for nearly 90 percent of total world soybean meal trade during the next 10 years. Argentina, the world's largest soybean meal exporter, increases its share of the world market from around 45 percent in recent years to 55 percent. Brazil's share of world exports remains in the 20-25 percent range while the shares held by the United States and other exporters fall.

• Argentina imposes higher export taxes on soybeans than on soybean products. This has provided an incentive for the country to develop a large oilseed crushing capacity. Argentina maintains high utilization of its growing crushing capacity by importing soybeans from Brazil and other South American countries.

• In Brazil, strong growth in domestic meal consumption due to rapid expansion of the poultry and pork sectors limits increases in soybean meal exports. Also, domestic soybean crushing capacity is not expected to grow as fast as soybean production because Brazil's differential export tax structure favors exporting soybeans rather than soybean meal or soybean oil.

• U.S. soybean meal exports hold steady at around 8 million tons throughout the projections, but the U.S. share of world trade declines steadily from more than 14 percent in recent years to less than 11 percent by 2018.

• The EU continues to be a small but steady exporter of soybean meal to Russia and other East European countries. India remains an exporter, although export volume declines as domestic use, especially for poultry feed, rapidly expands.

Definition of country groups

World demand for soybean oil imports climbs 3.2 million tons (29 percent) in the projections, bolstered by rising food use and increased demand for use in biofuel production. China and India are the world's two largest soybean oil importers, primarily for food use. In recent years, their combined imports have been around 3.5 million tons, more than a third of total world imports. The growth in soybean oil trade will be constrained by competition with palm oil, which claims the top ranking in world vegetable oil trade.

• Import demand for soybean oil rises in nearly all countries and regions. Income and population growth in North Africa, the Middle East, and Latin America contribute to gains in soybean oil imports. Although rising international prices for soybean oil will temper consumption, especially in developing countries, imports by the North Africa and the Middle East region are projected to be exceeded only by those of China.

• India remains one of the world's largest soybean oil importers. Factors that contribute to continued growth in imports include burgeoning domestic demand for vegetable oils and limited capacity for domestic production of oilseeds. Low yields, associated with erratic rainfed growing conditions and low input use, inhibit growth of oilseed production in India. India sharply reduced edible oil tariffs to zero in 2008 in response to high world prices. Since then, soybean oil tariffs have been raised. However, the projections assume that the tariff rates will return to near traditional relationships, and eliminate a tariff disadvantage for soybean oil relative to palm and other oils.

• China experiences a growing demand for vegetable oils. However, land-use competition from other crops constrains area planted to oilseed crops. Even with strong increases in soybean imports for crush, domestic demand outpaces vegetable oil production and fuels a moderate expansion in soybean oil imports.

• The EU imports more soybean oil to replace some of the rapeseed oil that is used in the production of biodiesel, although imports of sunflowerseed oil and palm oil will also be in great demand.

Definition of country groups

Argentina's and Brazil's combined share of world soybean oil exports rises slowly from around 80 percent early in the projections to nearly 85 percent by the end of the projections.

• Argentina is the leading exporter of soybean oil, reflecting the country's large crushing capacity, its small domestic market for soybean oil, and an export tax structure that favors exports of soybean products rather than soybeans. Increases in soybean crush and soybean oil exports are supported by gains in Argentine soybean production due to extensive double-cropping, further adjustments in crop-pasture rotations, and the addition of marginal lands in the northwest part of the country. Argentina also increases soybean imports from other South American countries in order to more fully utilize its crushing capacity. Despite continued expansion in Argentina's biodiesel production, soybean oil exports are also expected to rise strongly.

• Brazil's expansion of soybean production into new areas of cultivation enables it to increase both its volume of soybean oil exports and its share of world trade.

• The United States remains the world's third-largest soybean oil exporter. U.S. soybean oil exports are constrained by increased use for biodiesel production, and the U.S. share of world trade is projected to fall below the average of recent years. However, U.S. exports will be supported as imports supplement the domestic edible oil supply. U.S. imports of canola oil from Canada and palm oil from Southeast Asia are projected to continue to grow strongly.

• In the EU, exportable supplies of vegetable oils are limited by the growth in biodiesel production.

Definition of country groups

Global rice trade is projected to grow 2.4 percent per year from 2009 to 2018. By 2018, global rice trade exceeds 38 million tons, 22 percent above the 2006 record. The main factors driving the expansion in global trade are a steady growth in demand—largely due to population growth in developing countries—and the inability to significantly boost production in key importing nations.

• Long-grain varieties account for around three-fourths of global rice trade and are expected to account for the bulk of trade growth over the next decade. Medium- and short-grain varieties account for 10-12 percent of global trade, with Northeast Asia the largest market. Aromatic rice, primarily basmati and jasmine, makes up most of the rest of global rice trade.

• Indonesia, the Philippines, and Bangladesh become the three largest rice-importing countries by the end of the projection period. By 2018, each country is projected to import 2.3 million tons of rice or more. These three countries have limited ability to expand production and are expected to account for nearly half of the increase in global rice imports over the next decade.

• In Sub-Saharan Africa and the Middle East, strong demand growth is driven by rapidly expanding populations. Production growth is limited by climate in the Middle East and by infrastructure deficiencies in Sub-Saharan Africa. Sub-Saharan Africa accounts for 29 percent of the increase in world rice trade between 2009 and 2018. Iraq and Saudi Arabia account for most of the increase in imports by the Middle East.

• The Central America and Caribbean region is projected to expand imports over the next decade, increasing almost 0.5 million tons to more than 2.1 million by 2018. Population growth and rising per capita incomes boost rice consumption and raise this region's imports.

• The EU will remain a major market for rice, although import growth will be modest. Consumption growth will be driven by a larger immigrant population. North American imports will also expand over the next decade, with both total and per capita consumption rising.

• Imports by the former Soviet Union are projected to decline as a result of strong production growth and stagnant demand.

Definition of country groups

Asia remains the largest rice-exporting region throughout the projection period.

• Thailand and Vietnam, the world's largest rice-exporting countries, account for half of all rice exports and more than 40 percent of the growth in world exports in the coming decade. Thailand's exports increase 2.6 million tons to more than 12 million by 2018. Both area and yield are projected to increase in Thailand. Vietnam's export expansion is smaller, rising from 5.1 to 5.6 million tons. Per capita consumption declines for both exporters.

• Pakistan is currently the world's third-leading rice exporter and exports are projected to slightly increase over the next decade to 3.8 million tons by 2018. Pakistan has sharply boosted rice area and production in the past few years. In 2008, Pakistan gained markets due to India's ban on exports of non-basmati rice. Pakistan's agricultural sector is confronting a growing water shortage and a decaying infrastructure, limiting production and export gains.

• The United States is currently the fourth-largest rice-exporting country. The United States is expected to increase exports from 3.3 million tons early in the projections to 4.2 million by 2018. A slight area expansion, continued yield growth, and slow growth in domestic use result in larger exportable supplies. The United States becomes the third-largest exporting country early in the projection period.

• India has typically been the third- or fourth-largest rice exporter since the mid-1990s, although export levels have been rather volatile, primarily due to fluctuating stock levels and government policies. India's exports are currently limited by a ban on non-basmati sales. Exports are projected to increase about 700,000 tons to 3.6 million by 2018 as production growth outpaces consumption and India's current export ban is removed. India's production is constrained by slow progress in raising average yields.

• China, the sixth-largest rice-exporting country, is projected to raise exports by 1.1 million tons to 2.8 million tons by 2018. The increase in exports is primarily due to a decline in per capita consumption. Little change in production or total disappearance is expected. Higher yields are projected to offset declining area. Reductions in per capita consumption, a result of continued diet diversification resulting from higher incomes, are expected to offset population growth.

• Australia virtually exits the rice export market due to competing demands for water and, thus, uncertainty regarding availability of irrigation water.

Definition of country groups

With global cotton consumption growing dramatically, international trade has become increasingly important in world cotton markets. During the last decade, world consumption climbed at a 3.8 percent annual growth rate while world trade rose 4.2 percent a year. Not only has textile trade liberalization boosted world cotton demand through increased efficiency, but geographic shifts in mill use of cotton have increased the role of trade in meeting the global textile industry's need for cotton. Trade's importance has rebounded in recent years as the textile sectors in China and Pakistan have grown substantially faster than their domestic cotton production. Imports are expected to increase in a number of other Asian countries as well. Asia's share of world cotton imports is projected to rise from less than 72 percent in 2009 to more than 76 percent in 2018.

• The textile industries in China, India, and Pakistan have been the major beneficiaries of textile trade liberalization as a result of the elimination of Multifiber Arrangement (MFA) quotas in 2005.

• China has been importing record amounts of cotton as its textile industry's growth rapidly accelerated with a booming economy and World Trade Organization (WTO) accession. Both its textile industry and its cotton imports are expected to grow more slowly than the rapid increases since 2001. However, during the next decade, the increase in cotton imports by China is projected to account for half of the global increase in cotton imports.

• Pakistan has emerged as a major importer in recent years and is projected to be the world's second largest importing country during the next 10 years.

• In recent years, Turkey's textile industry has benefited from favorable trade access to the EU, its major market for textile and apparel exports. However, the end of the MFA quotas gives lower cost competitors more favorable access to EU markets. Turkey's cotton imports are projected to rise slowly over the next 10 years, but not enough to keep its share of world trade from falling slightly.

• The EU, Japan, Taiwan, and South Korea all steadily reduce their cotton imports as textile trade reforms and/or higher wages in these countries drive textile production to countries with lower wages and other costs.

Definition of country groups

Globalization is expected to continue to move raw cotton production to countries with favorable resource endowments and technology. Traditional producers with large land bases suitable for cotton production continue to benefit from post-MFA trade patterns. Such producer/exporter regions include the United States, Sub-Saharan Africa, and Brazil. The importance of technology has been highlighted by the impact of India's rapid adoption of genetically modified cotton, nearly all Bacillus thuringiensis (Bt) cotton.

• The United States continues as the world's leading cotton exporter throughout the projections. Exports climb 32 percent to more than 15 million bales by 2018/19, reaching one-third of overall world trade. However, the U.S. share of world exports is still well below the 40-percent average realized for the first half of this decade.

• The Central Asian countries of the former Soviet Union have been the principal U.S. competitors since the early 1990s. However, government policies in Central Asia promoting investment in textiles have resulted, to some extent, in exports of textile products rather than exports of raw cotton. Furthermore, the region's cotton production is expected to grow only slowly.

• Sub-Saharan Africa's exports rose rapidly during much of the last decade, but since 2006, low world prices and the strength of the Euro have led to lower output and exports by West Africa. The 2008 planted area in the member countries of the Communaute Financiere Africaine (CFA) has fallen to its lowest level since just after the 1994 devaluation of the CFA franc. Some rebound in output is expected as these economies develop and as Bt cotton is adopted by the region's producers. The region's exports are projected to rise more than 20 percent during the next 10 years.

• Improved cotton yields in India, largely due to the adoption of hybrid cotton containing the Bt gene, have raised India's production and exports in recent years. Yield growth is projected to continue as the area planted to Bt cotton expands. The increase in cotton output is expected to enable India to increase domestic textile production and remain a major cotton exporter and competitor to the United States in world markets.

The growth in world per capita meat consumption slows during the coming decade to about a third of a percent per year. Still, meat shipments from major exporters trend upwards at 1.3 percent per year. Growth rates of exports from major exporters of beef, pork, and poultry meat average 1.4, 1.7, and 0.9 percent per year, respectively, between 2009 and 2018. During this period, exports rise 0.9 million tons for beef, 0.9 million for pork, and 0.7 million for poultry. Rising per capita incomes combined with population growth in a number of countries are the driving forces behind the projected growth in global meat demand.

• Canadian beef exports are projected to rise slowly during the next decade. However, they do not reach the record set in 2002, prior to the Canada's first case of Bovine spongiform encephalopathy (BSE).

• In response to Russia's policies to stimulate meat production, net imports of meat decline slowly during the coming decade.

• China became a pork net importer in 2008 due to swine disease problems and imports for the Olympics. China is projected to resume being a small net exporter within several years.

• EU beef exports remain well below the annual WTO limit on subsidized exports (817,000 tons) as policy changes lower beef production. These factors limit the EU's competitiveness in international markets.

• Argentine beef exports declined sharply after the peak in 2005. Export taxes on beef and changes in other policies have made Argentina's exports less competitive. Beef exports are projected to continue their downward trend as growth in consumption exceeds production.

• The projections assume no changes in the set of countries recognizing Brazil as free of foot-and-mouth disease (FMD), thus limiting Brazil's ability to compete in some markets for pork. However, exports from Brazil's expanding pork sector are expected to be competitive in price-sensitive markets such as Russia and Asian countries other than Japan and South Korea.

• Canada is projected to remain the world's third largest pork exporter.

• During the coming decade, Brazil is expected to continue to be the largest exporter of poultry products, bolstered by low production costs and competitive export prices.

• U.S poultry meat exports are projected to increase, due in part to the U.S. dollar's low level relative to the early 2000s.

Definition of country groups

Beef imports by major importers expand nearly 1 million tons (19 percent) between 2009 and 2018. Traditionally, developed countries were the primary importers of beef. However, Brazil has become a large exporter of lower priced grass-fed beef that is imported by lower income countries. The projections assume gradual recovery of U.S. exports to South Korea and Japan.

• Grain-fed beef imports are projected to rise slowly in higher income countries. U.S. beef exports to these countries are projected to rebuild over the next 10 years.

• Rapid import growth is projected for a number of middle-income countries in northern Africa and the Middle East. Faster growth in population and per capita incomes stimulate demand.

• U.S. beef imports, primarily of grass-fed lean beef from Australia and New Zealand for use in ground beef and processed products, rise slightly through the period. Also, strong Asian imports of beef enable Australia and New Zealand to maintain significant levels of exports over the projection period.

• After declining in 2009, Mexico is projected to increase beef imports. Much of Mexico's imports are of higher valued grain-fed beef from the United States.

• The projections assume that Russia's tariff-rate quota (TRQ) for beef, first imposed in 2003, remains in effect until 2009. In the longer run, the growth in Russia's beef imports resumes as rising consumer demand outpaces gains in domestic production. Russia remains a large market for EU and South American beef exports. In recent years, Russia has imported more beef from Uruguay, Paraguay, and Australia as shipments from Argentina have declined.

Definition of country groups

The major pork importers are projected to increase trade by about 500,000 tons (11 percent) between 2009 and 2018.

• Mexican pork imports increase more than 190,000 tons (36 percent) between 2009 and 2018, making Mexico one of the fastest growing pork importers. Increases in income and population are the primary drivers of Mexico's increasing demand for pork. Mexico accounts for more than a third of the growth in global pork trade during the coming decade.

• Some higher income countries in East Asia increase pork imports to satisfy demand for selected cuts of pork, especially pork bellies. The increase in South Korea's imports accounts for nearly one-fourth of the increase in world pork imports during the projections.

• As with beef, the projections assume the TRQ that Russia imposed for pork in 2003 remains in effect until 2009. Although the TRQ initially lowered pork imports, Russian imports of competitively priced pork from the EU and Brazil have risen as demand growth continues to exceed Russian pork production gains. During the last half of the projection period, Russia's policies to stimulate grain and livestock production are projected to cause pork imports to begin to decline.

• In China, increasing incomes boost per capita pork consumption and raise imports in the projections. Although China's pork production and exports have declined since 2006 due, in part, to swine disease problems, they are projected to resume growth within the next couple of years. The country resumes being a small net exporter for the rest of the projection period. Hong Kong's pork imports are expected to rise steadily during the coming decade.

Definition of country groups

Poultry meat imports by major importers are projected to increase by about 0.7 million tons (11 percent) from 2009 to 2018. Declines in imports by Russia, non-EU Europe, and Japan are more than offset by large increases in imports by the rest of the world.

• Poultry imports by Egypt, Saudi Arabia, and other countries in the North Africa and Middle East region now account for 35 percent of major trader imports and are projected to rise more than imports by all other countries combined. Economic and population growth will boost demand. Ongoing animal disease concerns in a number of countries are expected to slow growth in domestic production and increase demand for imports.

• Rising consumer incomes increase poultry demand and imports in Mexico and a number of Central American and Caribbean countries. Poultry products remain relatively less expensive than beef or pork, further stimulating demand. Mexico's domestic poultry production continues to increase, but lags rising consumer demand, and imports rise nearly 140,000 tons (21 percent) from 2009-2018.

• Russia's poultry imports decline during the projections, but it remains the world's largest poultry importer. Policies that reduce the poultry TRQ and stimulate grain production boost poultry production and restrain poultry imports. Slower growth in per capita income and consumption of poultry also reduce the need for imports.

• South Korea's imports of poultry meat rise more than 75 percent during the coming decade. Although imports start from a low base level, increasing per capita consumption combined with environmental restrictions on expanding production boost imports.

• Because of avian influenza, some major poultry-exporting countries such as Thailand and China have shifted most of their exports to fully cooked products. Due to their higher costs, these cooked poultry products will be marketed to developed or high-income countries in Asia, Europe, and the Middle East.

• China's rising consumption of poultry meat is met by expanding domestic production, while the country's poultry imports and exports each grow by about 100,000 tons.

Long-Term Projection Tables

• 2009-18 Long-Term Projection Tables are available in spreadsheets (wk1 format).

Other Topics in The Online Baseline Presentation

• Briefing Room Front Page
• Summary of Projections
• Macroeconomic Assumptions
• U.S. Crops
• U.S. Livestock
• U.S. Agricultural Sector Measures

Top of page