FAS Weekly Attache Report Digest
November 16, 2002

BRAZIL, November 7, 2002 -- Post lowered the 2002 wheat production forecast to 3.1 million tons due to weather-related losses. As a result of the lower production, the import forecast was raised slightly. However, high wheat prices will dampen consumption. Post forecasts rice production in 2002/03 to remain at the same levels as the previous year.

RUSSIAN FEDERATION, November 7, 2002 -- Post increases its total Russian grain production estimate for MY 2002 to 85 million metric tons (mmt), the majority of which will be wheat. Due to an extremely active first quarter of the marketing year, wheat and barley exports are forecast at historic highs despite few improvement in domestic infrastructure, potential restrictive trade measures of the EU, and shipping bottlenecks. State procurement of grain will be conducted again this year, but is expected to have little impact on prices.

EUROPEAN UNION, November 7, 2002 -- Refund rates were set for the period November 2002 - January 2003. Rates increased for tomatoes, oranges, lemons and table grapes but decreased for apples.

ISRAEL, November 7, 2002 -- The Biotechnology Committee of the Food Control Services of Israel's Ministry of Health has released for public comments a proposal for regulations regarding the labeling of genetically modified corn and soy beans and their products. In their present form the regulations are opposed by some government ministries and by the food processing industry. In general, the regulations follow the European model but do not require the labeling of processed products if they do not contain genetically modified DNA or protein above one percent.

AUSTRALIA, November 7, 2002 -- Australia has concluded free trade agreement negotiations with Singapore. The agreement will likely have only a limited impact on bilateral agricultural trade. The agreement indicates the Australian government's interest in pursuing bilateral free trade agreements.

VENEZUELA, November 7, 2002 -- Venezuela remains a milk deficit country, and production of powdered milk has fallen due to poor prices and weak demand. Powdered milk imports were high in 2001 due to the over-valued Bolivar, but have declined in 2002 following the devaluation. In addition, the Venezuelan Government has been restricting the issuance of import licenses in an attempt to support local production. Per capita milk consumption, after increasing in 2001, has resumed it's decade-long decline.

SPAIN, November 8, 2002 -- Although there has been a deceleration in the Spanish economy, 2001 GDP growth was still 2.5 percent and 2002 GDP growth is estimated at 2.0 - 2.2 percent. GDP in 2003 is expected to grow by three percent, which, together with a lower inflation rate of three percent (3.5 percent in 2002) and a further increase in the number of tourists, will lead to a higher consumption and a continuous demand of new products.

THAILAND, November 8, 2002 -- Export prices remained unchanged as strong Baht dampens export demand and the supply of new crop is limited by flood-delayed harvesting.

EUROPEAN UNION, November 8, 2002 -- 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".

CANADA, November 12, 2002 -- Canada's market for vending-machine foods is growing and poised for significantly greater growth as new and merging technologies enable the country's automatic merchandising industry to capitalize on major changes in consumer behavior.

CANADA, November 12, 2002 -- In Canada, there is a demand for a greater variety of dinners/entrees, healthier foods, and innovations that enhance flavor and save time. In this context, opportunities exist for the introduction of new frozen food varieties that fit this profile.

MEXICO, November 12, 2002 -- The forecast for Mexico's MY 2002/03 sorghum production has been lowered, due to reduced planted area. Also, MY 2001/02 corn imports estimates have been raised, reflecting preliminary final official data. Similarly, corn exports for MY 2001/02 have been raised to 92,000 MT, due to a new support program to export corn. Also, the corn export forecast for MY 2002/03 was revised upward.

AUSTRALIA, November 12, 2002 -- Australia's milk production in 2002/03 is forecast at a record 11, 723 TMT, one percent above last year's output and roughly in line with ABARE's projection of a two percent rise. Current drought conditions are expected to constrain further growth in milk output. Significant production growth is predicted in 2002/03 for all major dairy product categories. High production levels and relatively high stocks of dairy products are expected to lead to sharply higher exports of these products in 2002/03.

PAKISTAN, November 12, 2002 -- Pakistan's MY 2002/03 cotton production is forecast at 1.7 Million Metric Tons (MMT), 15 percent lower than earlier estimations based on lesser area harvested and larger-than-expected loss from pest infestation. Production inputs, primarily irrigation, remained adequate during the corp development and fruiting stages but proved lacking during pre-harvest production as pest infestation has become a serious problem since the middle of September, 2002.

CHINA, PEOPLES REPUBLIC OF, November 12, 2002 -- Despite better weather, lower planted area will lead to lower rice prodution in 2002. Imports of Thai fragrant rice are being hurt by increased production of cheaper domestic fragrant rice.

DENMARK, November 12, 2002 -- Denmark ranks fourth among world suppliers of fish products. Fresh fish is generally imported from non-EU countries, then processed and exported to EU member countries. Constantly decreasing EU cod quotas are increasing Danish interests in finding alternative suppliers and import substitutes.

SOUTH AFRICA, REPUBLIC OF, November 12, 2002 -- In spite of reports that a moderate El Nino can be expected this year, we still maintain our 9.5 million ton estimate for the 2002 corn crop, compared to the 9.2 million ton 2001 crop. The bigger crop expected is due to an increase in the area planted and increased use of inputs. A bigger crop will alleviate supply pressure in the region and may even soften prices, which are currently a big concern for both government and the consumer.

CANADA, November 12, 2002 -- Opportunities exist in the Canadian market for U.S. exporters of Asian-style food products. Canadians spend $6 billion annually on Asian-style foods. Of Canada's 31.7 million population, an estimated 5% are of Asian origin and increasing by a compound annual rate of nearly 9% over the course of the last five years.

POLAND, November 12, 2002 -- Poland's 2002 grain crop has been estimated at an only slightly lower level than occurred in 2001. Favorable weather resulted in increased yields and improved quality. Together with lower domestic prices, these factors are stimulating relatively large wheat exports and reduced imports. In MY 02/03, it is likely that for the first time since MY 91/92, Poland will have a positive grain trade balance.

TURKEY, November 12, 2002 -- It is fair to say that the vast majority of processed food products available in Turkey are locally made using local ingredients. In some sectors, however, there is significant demand for ingredient imports. The growth and development of the processing food sector will continue to provide opportunities for imports of raw materials and sepcialized ingredients. Currently, opportunities exist for edible oils, some grains and legumes, and specialized food additives.

THAILAND, November 12, 2002 -- The Thai Government is reportedly ending its informal waiver of the 2000 requirement that all meat facilities in exporting countries be inspected by Thai officials.

THAILAND, November 12, 2002 -- The Thai Government decided not extend the two-year waiver of their regulation, requiring the inspection of meat processing plants in supplier countries.

EUROPEAN UNION, November 12, 2002 -- Total EU imports in CY 2001 of fresh and processed fruits and vegetables from the U.S. amounted to 829,023 MT, a decrease of 10.5% compared to 2000, with a value of 1.1 billion U.S. dollars, down 9.3%. Total EU exports of fresh and processed fruits and vegetables to the U.S. amounted to 638,579 MT in 2001, up 3.2% compared to 2000 while the value decreased with 2.6% to 809 million U.S. dollars.

ROMANIA, November 12, 2002 -- AgBucharest estimates of the 2002 grain and oilseed crops indicate that Romania harvested 7.3 MMT of corn, 0.9 MMT of sunflowerseed and 0.1 MMT of soybeans. While some corn and sunflower seed surplus will be exported, Romania is expected to import nearly 100,000 MT of soybeans to cover domestic consumption needs. For the second consequtive year, the GOR will offer in 2002 subsidies to expand higher value crops and thus develop alternatives to the major cereals, which is anticipated to increase the area to oilseed crops.

NORWAY, November 12, 2002 -- Norwegian production of farmed salmon decreased for the first time in 10 years. Greater world market competition, lower world market prices and constraints under Norway's agreement with the EU are factors contributing to this development.

CANADA, November 8, 2002 -- Driven by export sales, Canadian production of frozen french fries is forecast to continue expansion through MY2002/04. Reliance by Canadian potato processors on the U.S. market deepened during MY2001/02 as exports of frozen french fries soared by 16% over the year earlier level to 653,438 metric tons worth $413 million. Canada failed to increase frozen french fry exports to the rest of the world during the same period.

INDONESIA, November 13, 2002 -- Post revised Indonesia's total rice imports upward from the previous estimate to 2.0 MMT in MY2001 and 2.5 MMT for MY2002. Indonesia's domestic milled rice production is forecast to inch up to 33,089,000 MT for MY2002, compared to 32,960,000 MT for MY2001, as a result of improving milling rates. The Ministry of Agriculture has proposed to increase import tariffs on rice to Rp. 735/kg (51 percent) from Rp. 430/kg (30 percent), in an effort to protect farmers, by discouraging imports, and increasing domestic production and farmgate prices.

KOREA, REPUBLIC OF, November 13, 2002 -- Despite 200,000 MT less production than previously expected and 400,000MT of food aid to N. Korea, MY2002 ending stocks are still expected to be higher than MY 2001

JAPAN, November 13, 2002 -- Japan's 2003 fluid milk output is forecast unchanged following a modest rebound in 2002. Fluid milk utilization for drinking is expected to increase in 2003, while processing use will likely decline. The NFDM surplus situation is expected to continue in 2003, even as production declines. Japan's butter production is forecast to fall by 6% in 2003. Butter imports under the current access are expected to continue in 2003. New specification standards for Japan's current access tender may open the door to U.S. butter sales to Japan. Cheese imports are expected to grow by 2% in 2003, supported by strong demand for natural cheese.

CHINA, PEOPLES REPUBLIC OF, November 13, 2002 -- In addition to reducing tariffs, China's WTO accession is expected to benefit U.S. food exporters by accelerating development of the country's vast distribution and logistics industries. The establishment of efficient, nationwide networks will allow deeper and more transparent penetration of imported goods. On the demand side, WTO accession is expected to create new markets for high-value food and agricultural products as rising disposable income levels fuel an ongoing nationwide consumer revolution.

SWEDEN, November 13, 2002 -- In response to conservation interests, the Swedish Government has decided to halt all Swedish cod fishing for one year, starting in 2003. The EU Agriculture Commissioner has assured that the Swedish yearly quota of 15,000 metric tons will not be transferred to any other country. Imports are expected to rise in MY 2003.

INDIA, November 13, 2002 -- *Decision on GM mustard deferred*, *GM golden rice to be made available for local adaptations*, *Draft for biotech regulation proposed*, *A Californian wine comes to Delhi*, *Qualification required for owners & managers of food factories*, *Indian Prime Minister seeks trade block with Asean*, *Wheat exports to South East Asia*, *Wheat for Afghanistan*, *No immediate plans to cut palm oil duty*, *Garment sales down 10% in October*.

CANADA, November 12, 2002 -- "What's New, Eh?" * Canada Proposes Free Trade Agreements with Andean Countries and Dominican Republic * Crowd Gathers as Prairie Farmers Go to Jail * British Columbia Replaces Forest Practices Code * New Support for P.E.I. Hog Industry * Saskatchewan Announces Short-term Hog Loan Program * Western Standards Committee Holds First Meeting * Farmer Seeks Supreme Court Appeal Against Monsanto * Trade Mission to Africa * Proactive Stance by Beef Industry Helped Improve Demand Says Report * Majority of Canadians Eat Snack Foods on a Daily Basis *

SAUDI ARABIA, November 12, 2002 -- An increasing number of Saudis shop regularly at supermarkets, especially women. The retail sector now accounts for about 60 percent of all food purchases in the Kingdom; the balance in the wholesale sector. Supermarket shopping is considered a primary form of entertainment for the Saudi family. Many supermarkets have built large play areas for children and are surrounded by several boutiques, photo, music, and barber shops, and fast food restaurants.

EGYPT, November 15, 2002 -- Since the beginning of MY 2002/03, Egypt imported 3,049,000 MT of wheat. France is expected to dominate Government of Egypt wheat purchases this year despite the recent importation of 420,000 MT of American wheat by GASC. Private sector continues to source wheat from non-traditional suppliers ( i.e Russia, Ukraine and Pakistan).

INDIA, November 15, 2002 -- The Coffee Board forecasts India's 2002/03 coffee production at 280,000 tons (4.7 million bags of 60 kg) compared with 300,600 tons (5.0 million bags) in 2001/02.

PORTUGAL, November 15, 2002 -- Portugal's retail food sector is very competitive and is increasingly dominated by the large super/hyper market chains which account for 60 percent of food purchases. Demand for new and high-quality food products is high. Although the United States facces still competition from EU suppliers, U.S. suppliers could penetrate this market through aggressive promotion. Having a local representative is essential to enter this market.

INDONESIA, November 15, 2002 -- Despite strong protest from Indonesia's tobacco industry, the Government of Indonesia (GOI) announced a new regulation that increases the excise duty and the minimum retail prices of cigarettes. The regulation [Minister of Finance Decree No. 449/KMK.04/2002] was signed on October 24, 2002, and effective November 1, 2002.

KOREA, REPUBLIC OF, November 15, 2002 -- Despite opposition from Korean dairy producers, Korea may reduce access for imported forages (including U.S. exports of grass hay) to address an oversupply of milk and encourage local rice producers to shift to forage production.

THAILAND, November 15, 2002 -- Export prices increased slightly due mainly to the continued appreciation of Baht, resulting in the sluggish export demand.

EUROPEAN UNION, November 15, 2002 -- 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".

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