FAS Weekly Attache Report Digest
March 15, 2003

CROATIA, March 13, 2003 -- Poultry production and consumption have risen in recent years and are expected to continue to grow. Croatia has a domestic surplus of poultry meat but there is negligible domestic production of mechanically deboned meat (MDM) to supply the growing domestic meat processing industry. Unfortunately, U.S. suppliers are being shut out of the MDM market due to EU-related phytosanitary restrictions.

EUROPEAN UNION, March 10, 2003 -- This weekly report contains data on rice prices in the U.S., Thailand and the EU. It also lists current import duties and export subsidies in the EU. All information will be published as such in the weekly USDA publication "Rice Market News".

EUROPEAN UNION, March 10, 2003 -- The European Commission presented it's thoughts on co-existence, preferring a country level approach and using or adopting current legislation, with voluntary local restraints mooted as one possible solution. Importantly, the Commission stressed the right of EU farmers to choose to grow GM crops. This approach will not please the hardliners opposed to GM technology in the EU.

EUROPEAN UNION, March 10, 2003 -- This reports describes the tariffs facing US exporters of rice to the EU as well as the concessions available for US exporters and other third countries exports to the EU.

PERU, March 10, 2003 -- Fishmeal production in CY2003 is forecast at 1.77 Million Metric Tons, an increase of 40,000 MT compared to the previous year. Soybean meal imports are expected at 500,000 MT and soy oil imports should reach 210,000 MT in CY2003.

AUSTRALIA, March 10, 2003 -- Australia's drought-reduced 2002/03 wheat crop is now estimated at 10 MMT, down from last season's record harvest. High demand for feed grain has diverted greater quantities of wheat into feed channels. Wheat exports in 2002/03 are expected to be down sharply from 2001/02. Recent rains have put a dent in the drought that has sharply reduced Australia's summer crop area and production outlook. Output of all the principal summer crops - cotton, rice & sorghum - is expected to be sharply below year-earlier levels. Cotton, rice and sorghum export volumes will also be sharply lower. Australia is importing feed grains, the first time this has happened since 1994/95. In February 2003, ABARE revised Australia's 2002/03 wheat crop downward to 9.4 MMT, about 6 percent lower than their previous projection and 62 percent below last year's revised record production of 24.854 MMT

JAPAN, March 10, 2003 -- Key upcoming marketing activities of the U.S. Agricultural Trade Offices in Japan (Tokyo and Osaka) this year include: Foodex Japan 2003, the largest international food and beverage exhibition in Asia, March 11-14; IFIA Japan 2003, the International Food Ingredients & Additives Exhibition and Conference, June 11-13; Health Ingredients Japan 2003, October 7-9; Hoteres & Foodex Kansai 2003, November 19-21; Japan Pet Fair 2003, the largest event in Japan specializing in pet products, March 27-28; "Months of American Food in Hokkaido", ATO Tokyo's intensive joint retail and food service campaign in Hokkaido during April-June, 2003; and "Great American Food Market", the ATOs' virtual market website has been in operation since January 15 and we are actively recruiting both Japanese importers and ‘new-to-market' American suppliers to benefit from this new marketing tool.

PHILIPPINES, March 6, 2003 -- After numerous complaints from various sectors, the National Food Authority (NFA) recently amended its rice import guidelines for 2003. Under the amended guidelines, only rice farmers/farmers' organizations will be allowed to import rice outside the NFA. Each rice farmers/farmers' organizations will be allowed to import a maximum of 500 MT per quarter, but not to exceed 1,000 MT for the whole of 2003.

PHILIPPINES, March 6, 2003 -- Exports of coconut oil (CNO) and copra meal in October 2002 declined by 20 and 52 percent, respectively, compared to their levels the previous year. CNO and copra meal prices were generally higher. There were no copra exports during the month.

THAILAND, March 10, 2003 -- In January 2003, Thailand rice exports totaled 571,696 tons, down 16.5 percent from the same period in the previous year.

THAILAND, March 10, 2003 -- Exports prices remained high due to current limited paddy supplies.

KOREA, REPUBLIC OF, March 11, 2003 -- Korea's crushing industry is expected to recover nearly to pre-financial crisis levels in 2003 driven by increasing feed and food demand. In turn, stronger crushing demand is expected to result in increased imports of soybeans.

NORWAY, March 11, 2003 -- Norway is a US$ 17.8 billion market for food products. Due to its severe winters and relatively short growing season, the country has a large import need and domestic production accounts for only 50 percent of the total domestic demand. However, the Norwegian market is very protected and domestic suppliers are highly subsidized. Although Norway is not a member of the European Union, they have implemented most of the EU rules and regulations concerning imports of consumer-oriented products. The market is dominated by a few large players with nation-wide distribution. There are opportunities for high-value products and for products which are not produced domestically and new-to-market products, including ethnic foods. Major impediments to U.S. exports to Norway include high tariffs, consumer resistance to products containing genetically modified (GMO) ingredients and the ban on imports of hormone treated beef.

NETHERLANDS, March 6, 2003 -- The Ministry started culling chickens of seventeen suspect farms. Transport restrictions have been relaxed.

PHILIPPINES, March 11, 2003 -- The Bureau of Internal Revenue issued Revenue Regulation No. 9-2003 establishing new guidelines in determining the current net retail price of new brands and variants of new brands of alcohol and tobacco products. The new regulation is part of ongoing efforts of the Philippine government to improve tax collection and increase revenues.

NETHERLANDS, March 6, 2003 -- Outbreak of possible avian influenza virus hits Dutch poultry sector.

GERMANY, March 6, 2003 -- On February 25, 2003, David Hegwood, Counsel to USDA Secretary Veneman, was a keynote speaker in a public event organized by the U.S. Embassy in Berlin. Agricultural WTO negotiations and biotechnology were discussed. Excerpts from local media reporting on the event are also included at the end of this report.

GERMANY, March 7, 2003 -- BSE has had a positive long-term effect on German fish consumption. Market promotion should focus on taste and fish being a delicacy rather than the health benefits of eating fish.

ECUADOR, March 6, 2003 -- Imports of wheat for MY 2003/2004 are forecasted at 450,000 MT, virtually unchanged over the past market year. The U.S. market share remains strong more than 48 percent. The winter rice and corn harvest will be delayed due to the abnormal weather conditions. Milled rice production is forecasted at 440,000 MT. Ecuador is to export 85,000 MT of milled rice, or its equivalent in paddy, to Colombia between March and July 2003. Corn imports are expected to reach 300,000 MT for the MY 2003. The U.S. market share for corn remains strong with 75 to 80 percent.

CROATIA, March 13, 2003 -- In 2002, Croatia imported 9,814 tons of rice with a total market value of approximately $4-5 million U.S. dollars. Officially, U.S. exports accounted for less then 2% of this market. However, significant levels of U.S. rice are transshipped from mills in the European Union. This report contains information on trade, importers, and tariffs.

INDIA, March 12, 2003 -- In the FY2003 Government Budget, although the peak "basic" tariff rate was lowered from 30 percent to 25 percent, agricultural and dairy products were specifially excluded, thereby denying any improved market access for these products.

NETHERLANDS, March 7, 2003 -- The Minister of Agriculture expects that the cull will soon catch up with the expansion of the avian influenza outbreak.

INDIA, March 12, 2003 -- *GEAC again rejects CSB imports*, *India signs preferential trade pact with Afghanistan*, *Bioengineered crop and food policy reviewed*, *Greenpeace, government enmeshed in Bt cotton issue*, *Oil prices surge on levy of excise duty*, *Edible oil imports dip further in February*, *Freeze msp of wheat and rice - economic survey*, *Investment in agriculture up*, *Iran interested in Indian rice*.

EUROPEAN UNION, March 12, 2003 -- European Commisisoner for Agriculture, Franz Fischler, in Geneva for a meeting with WTO Agricultre Negotiations Chairman Harbinson criticized the US's use of the de minimis rule and called for better balance in in any future agreement, in particular accounting for the trade distorting effects of policies.

TURKEY, March 12, 2003 -- MY 2003 is projected to be another good year for Turkish grains. Good weather after the new year eliminated most of the adverse effects of previous dry weather. In MY 2002 TMO purchased lower quantities of domestic grains (only about 350 TMT of wheat, 400 TMT of barley, 80 TMT of corn and 60 TMT of paddy rice) primarily due to relatively low procurement prices. Import duties remain the same for most grains. MY 2002 wheat imports were raised to 800 TMT, however Turkey is projected to import less wheat and similar quantities of corn and rice in MY 2003.

EUROPEAN UNION, March 12, 2003 -- The European Commission released its long awaited proposal for a harmonized regulation on feed and food controls. This is a framework regulation establishing the legal basis for all future feed and food controls, including import controls.

EUROPEAN UNION, March 12, 2003 -- No decision has been made on the need for a mandatory labeling requirement warning for infant botulism caused by honey consumption.

CANADA, March 12, 2003 -- Canada Disputes Commerce's Preliminary Duties on Wheat * Tariffs Unfair Laments "CWB" * Funding Doubled for Canadian Agri-Food Promotion * Traceability Holy Grail of the Food Processing Industry, Says McCain * Customers Resistant to GM Wheat Says CWB * Coalition Urges Greater Biosecurity * Ontario's Apple Growers to Vote on New Marketing Plan * Canadian Ginseng Production Increases * Ontario Corn Producers Elect New President * First Nations Licences to Battle Beetle Infestation

MEXICO, March 13, 2003 -- As a result of the economic slowdown, Mexico's total imports of grain and feed will likely increase only marginally in MY 2003/04. Production of rice, sorghum and dry beans is expected to increase slightly, while wheat and corn is expected to decline from last year's harvest.

AUSTRALIA, March 13, 2003 -- Australia's 2003/04 grain crops are expected to rebound sharply from the drought-reduced levels registered in 2002/03. Wheat production in 2003/04 is projected at 24 MMT, the second highest level on record and 14 MMT higher than in 2002/03. Attaining these 2003/04 production forecasts is contingent on a continued breakdown in the dry weather pattern that has characterized much of the Australian continent for over one year. Particularly critical will be precipitation over the next month or two that will be necessary for planting and establishing the 2003/04 winter grain crop. Higher expected grain availability in 2003/04 will allow grain stocks and exports to rise sharply from the levels that characterized 2002/03.

BELGIUM-LUXEMBOURG, March 10, 2003 -- The HRI sector is Belgium's second biggest industrial sector. However, restaurant, hotel and distribution sectors are all extremely competitive, with thousands of participants. Nevertheless, the market offers opportunities for nuts, beverages, seafood, and dried fruits.

PAKISTAN, March 13, 2003 -- Pakistan’s MY 2003/04 wheat production is forecast at 19 Million Metric Tons (MMT), assisted by widespread rains throughout the country in February 2003, and by an increased usage of fertilizer and herbicide inputs. Even with a large draw down in the government held stocks, the country is forecast to import 1.5 MMT. The GSM- 102 program should help the U.S. remain competitive in the important soft white wheat market. Pakistan’s MY 2003/04 rice crop is forecast at 4.5 MMT, another strong showing for this major rice exporting country. Exports are forecast at 1.6 MMT.

EGYPT, March 13, 2003 -- Egypt's total wheat imports are expected to decrease by 10 percent during MY 2002/03. U.S wheat exports are likely to lose 65 percent of their market share to non -traditional suppliers this year due to high US prices and ample supplies of low-priced wheat from the Black Sea Region. Egypt's total corn imports are expected to decrease by 25 percent due to the devaluation of the Egyptian pound. However, US yellow corn exports are expected continue dominating the market this year.

ARGENTINA, March 13, 2003 -- Argentine exports of wheat and corn during November 2002

ARGENTINA, March 13, 2003 -- Argentine exports of wheat and corn during December 2002

ARGENTINA, March 13, 2003 -- Argentine exports of oilseeds, meal and oil during November 2002

ARGENTINA, March 13, 2003 -- Argentine exports of oilseeds, meal and oil during December 2002

COLOMBIA, March 13, 2003 -- Colombia continues to a large importer of corn and wheat, with corn imports from the US projected at 1.78 million tons for 2002/03 and US wheat imports projected at 680,000 tons. Rising world prices have resulted in lower duties under the Andean Pact price band system. Colombia authorized rice imports from other Andean Pact countries of 150,000 tons (mainly Ecuador) for the period March 15 to June 15. Ecuador reportedly may not be able to supply the full amount needed, which could open the opportunity for US rice imports.

BULGARIA, March 13, 2003 -- The Bulgarian tree nuts market has grown from practically non-existent prior to 1997 to a value of $8 million or 15,000 MT in 2001/2002 due to the dynamic development of the food service and retail sectors. Total U.S. tree nut exports to Bulgaria in 2002 exceeded $1.1 million, mainly in California raw almonds. Prospects for further growth in 2003 are good, but closely related to disposable consumer income.

NEW ZEALAND, March 11, 2003 -- Fonterra reduced its payout forecast for the 2002/2003 season, while Tatua and Westland Milk Products indicate that they will maintain theirs. This puts new Fonterra suppliers, who made investment decisions based upon much higher milk sales price projections, under increased financial pressure. Fonterra is unlikely to achieve its growth target for this season.

PHILIPPINES, March 11, 2003 -- The Philippine Department of Agriculture (DA) has banned all imports of feeds, meat, meat products and by-products, milk, milk products, eggs and processed foods containing the same from Germany and the Netherlands, in response to recent reports of Dioxin contamination in those countries. The ban, formalized as DA Memorandum Order No. 9 dated February 26, 2003, became effective on March 5, 2003.

EUROPEAN UNION, March 14, 2003 -- The EU's Special Committee on Agriculture did not agree on a mandate to open Article XXVIII negotiations to remove the current Margin of Preference system for setting rice import duties.

THAILAND, March 14, 2003 -- Export prices declined slightly in response to increasing supplies of new crop.

EUROPEAN UNION, March 14, 2003 -- This weekly report contains data on rice prices in the U.S., Thailand and the EU. It also lists current import duties and export subsidies in the EU. All information will be published as such in the weekly USDA publication "Rice Market News".

NETHERLANDS, March 11, 2003 -- New possible outbreak of Avian Influenza near the border with Belgium.

EUROPEAN UNION, March 14, 2003 -- A proposal to harmonize nutrition and health claims in the European Union is close to being finalized. The main point of discussion is how to manage the approval of claims

SOUTH AFRICA, REPUBLIC OF, March 14, 2003 -- Adverse weather forced us to cut the 2002 commercial corn crop estimate to about 8.5 million tons compared to the 9.1 million ton delivered from the 2001 crop. The total crop estimate, including farm retentions and the crop in the developing sector thus reverts to 9.2 million tons after about 9.8 million tons were produced in the previous season. This will be more than sufficient to supply local and export demand. The wheat situation remains unchanged.

BRAZIL, March 14, 2003 -- The boom continues! Brazilian soybean production and exports after a remarkable 2002 crop are headed to new heights with the 2003 harvest now under way. Blessed with high international market prices and a strong US Dollar, Brazilian producers have been propelled to plant as much soybeans as possible. After a few years of decline, cottonseed production will recover slightly in 2003, and the outlook for 2004 is for an expansion in both crops.

BULGARIA, March 12, 2003 -- Demand for poultry and products in Southeast Balkans maintains its upward trend, powered by increasing incomes throughout the region. United States poultry prices are generally competive and stabilized at lower levels in 2002. The United States is consolidating its market share in most countries, becoming a steady supplier of relatively low-priced products, such as frozen broiler leg quarters.

PHILIPPINES, March 12, 2003 -- The Department of Agriculture has issued additional guidelines for meat importers using private and public bonded warehouses and other Bureau of Customs warehousing facilities, in an effort to crack down on the growing problem of meat smuggling in the country.

MEXICO, March 13, 2003 -- DRY BEAN BAN IS NOT POLITICAL, ASSURED SAGARPA*“RENEGOTIATING NAFTA BRINGS ABOUT CHAOS”*CAP CLAIMS U.S. EMBASSY OFFICIALS USED THREATS AGAINST FARMING GROUPS*TRQS ON EGMONT CHEESE*MEXICAN CUSTOMS ASKED TO STEP UP INSPECTIONS*SECRETARY OF THE ECONOMY SEEK SIDE AGREEMENTS*“MEXICAN BEAN EXPORTS HELD HOSTAGE”*CNA ALSO WANTS NAFTA SIDE AGREEMENT*“ITS TIME FOR THE RURAL SECTOR”*NATIONAL AGRICULTURAL DIALOGUE DISCUSSION ROUND SUMMARY*MEXICAN DIET NOT FAR FROM HARVARD UNIVERSITY’S*MEXICO’S TOURISM SECTOR ON THE UP AND UP*AGRICULTURAL DIALOGUE CULMINATES WITH NAFTA DISCUSSION*NAFTA PARTNERS WILL DISCUSS AGRICULTURE IN MONTREAL*INDIGENOUS COMMUNITIES IN FAVOR OF NAFTA RENEGOTIATIONS*

MEXICO, March 14, 2003 -- NO SURPRISES FOR THE NATIONAL FARMLAND AGREEMENT*“MEXICO: AN EXPORTING POWERHOUSE”*GOM NOT KEEN ON NEW BIOTERRORISM & BIO-SAFETY LAWS*ACCORDING TO SAGARPA, U.S. HAS MORE SUBSIDIES*“DISCUSSIONS WERE A WASTE OF TIME”*SAGARPA WILL LIFT MORATORIUM ON BT CORN RESEARCH*CNA ADOPTS USDA’S ‘5-A DAY’*GOM IS TO BLAME*LESS WATER PER PERSON*SECRETARY USABIAGA PLAYED DOWN DEFICIT*SUGARCANE FARMERS ASK FOX FOR HELP*NATIONAL AGRICULTURAL DIALOGUE NOT OVER*ACCORDING TO EXPERTS, AMENDMENTS ARE POSSIBLE*MIRROR LEGISLATION PROPOSED BY THE PRI*FARMING GROUPS DISCUSS NATIONAL AGRICULTURAL PACT*MEXICAN RESTAURANT INDUSTRY HURTING*“AGRICULTURE STILL POLITICIZED:” PRESIDENT FOX*NATIONAL AGRICULTURAL DIALOGUES: A SUCCESS*APPAREL INDUSTRY IN MEXICO IS PRO NAFTA

MEXICO, March 13, 2003 -- SECRETARY OF THE ECONOMY UPHOLDS NAFTA*NAFTA: THE SCAPEGOAT OF ALL OF MEXICO’S AGRICULTURAL PROBLEMS*MEXICAN AVOCADOS REACH RECORD-LEVEL HIGHS*“THE FARMLAND CAN’T STAND ANYMORE” WANT CORN AND BEANS EXCLUDED FROM NAFTA*FOX AND CHRETIEN CELEBRATE NAFTA BENEFITS AND THE FUTURE OF THE FTAA*NEW CERTIFICATE OF ORIGIN FOR ALL MEAT AND MEAT PRODUCT IMPORTS*WHAT ARE THE ACTUAL BENEFITS ATTAINED BY NAFTA?*“ELECTRICITY RATES ARE TOO HIGH FOR IRRIGATION PUMPS”*MEXICO PREPARES FOR NEW BIOTERRORISM FOOD SECURITY LAWS*SMALLER FARMERS CAN ALSO REAP THE BENEFITS OF NAFTA*“MEXICAN RURAL SECTOR IS IN A STATE OF EMERGENCY”*SRA NEEDS BETTER RESTRUCTURING* FOX PROTECTS NAFTA AND MEXICAN AGRICULTURE*CNG LOOKS TO NEGOTIATE OUTSIDE OF NAFTA* “I HAVE ALWAYS BEEN A SUPPORTER”: PRESIDENT FOX*CAP THREATENS NOT TO SIGN NATIONAL AGRICULTURAL PACT*MEXICAN BUSINESS LEADERS FEAR SCATHING U.S. RESPONSE*FREE TRADE AGREEMENT MEXICO-JAPAN*FARMING GROUPS ARE GETTING GREEDY*

RUSSIAN FEDERATION, March 14, 2003 -- On January 23, 2003, the Russian Federation announced the creation of tariff rate quotas (TRQs) on beef and pork imports. The yearly TRQs were set at 450,000 MT for imports of pork and 420,000 MT for beef, though the pro rated 2003 quota will be 337,000 MT and 315,000 MT, respectively. Russian production of pork is forecast to increase by six percent in 2003, while beef production is forecast to fall by two percent. As domestic production is not forecast to be greater than the reduced level of imports, consumption of beef and pork is expected to fall in 2003.

NETHERLANDS, March 14, 2003 -- So far positively diagnosed farms are only found in the center of The Netherlands. The Ministry of Agriculture is still fearing a second wave of outbreaks.

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