January 22, 2004
Czech 2003-04 Wheat Production Down 32%, Corn Quadruples
Czech Republic wheat production for 2003-04 amounted to 2.6 million metric tons, a 32% decrease from the previous year, according to a report issued by the U.S. Department of Agriculture.
Wheat
Area, yield, production
Winter wheat dropped by almost 40% while spring wheat increased by over 100%. Since winter wheat represents a much higher share of total production, the production drop was a result of lower area and lower yield - both caused by a long, cold winter with insufficient snow coverage.
Total wheat area reached 648,000 ha in MY 03/04, which was only two-thirds compared to MY 01/02. This trend reflects a shift to oilseeds during the past couple of years and unfavorable weather conditions in fall 2002 and winter 2003. Yield in MY 03/04 was 4.05 MT/ha, an 11% drop compared to the previous year.
Consumption
About one-third of total wheat production is used for milling and further food production. Two thirds is used as feeds.
Lower production of wheat in MY 03/04 will result in increased prices and a higher demand for wheat seeds. This should result in a return to previous years' acreage.
Trade
During July-October of MY03/04, the Czech Republic exported over 60,000 MT of wheat with 40,000 MT shipped to Germany, 12,000 MT shipped to Ukraine, and 5,000 MT shipped to Switzerland and neighboring countries (all EU-25). The Ministry of Agriculture is contemplating the use of export restrictions due to the domestic shortage. If this happens (through use of export licenses), domestic prices will increase.
During July-October of MY03/04, the Czech Republic imported around 700 MT of wheat, predominantly from Slovakia, Germany, Netherlands and Austria. Even though there is a shortage of wheat, traders do not expect large imports due to high prices (there is more talk about dipping into national reserves).
Prices
Currently wheat prices oscillate between $150-160/MT for milling wheat and $130-135 for feed wheat. If export restrictions are not utilized, spring prices should remain more or less at this level.
Barley
Area, yield, production
Area for spring barley was 31% larger in MY 03/04 compared to the previous year while winter barley area contracted by 30%. Since spring barley represents 85% of barley production, total barley production increased by 16% in MY 03/04 amounting to more than 2 million MT.
Yield of spring barley was 3.93 MT/ha; winter barley was only 3.12 MT/ha due to the bad winter. Average yield of barley in MY 03/04 was 3.78 MT/ha, which was a 3% increase compared to the year before.
Consumption
About one-third of barley production is used for malting, two-thirds for feeds. This year's barley quality is exceptionally high with samples containing higher share of protein. There is enough malting barley to cover domestic need.
Trade
During July-October 2003, about 60,000 MT of barley was exported. Exports went to the following countries (in 1,000 MT): Austria 14, Germany 12, Slovakia 10, Poland 8, Hungary 7, Romania 4, Croatia 3 and smaller amounts to Switzerland and Ukraine. Over 4,000 MT was imported, three quarters of it from Slovakia, the rest from Austria and Germany.
Prices
In the past years, there was a big difference between prices of malting barley and feed barley (high prices for malting barley, low prices for feed barley). This year it is expected that the difference will be diminished. While the price of malting barley will more or less remain at its usual $140- 150 level, price of feed barley will increase to $120-130.
Corn
Area, yield, production
Corn production has more than quadrupled in the past seven years. Five years ago the Czech Republic had to import one third of its domestic consumption. In MY 02/03, it became a net corn exporter with corn exports trailing after wheat exports. In MY 03/04, corn area increased by 10% compared to the previous year reaching 78,000 ha. It became popular for its high yields and relatively low maintenance. This year's production 435,000 MT was lower than in MY 02/03 (616,000 MT) as a result of much lower yield 5.6 MT/ha (last year 7.27 MT/ha). Low yield was caused by dry spring with lack of precipitation.
GMO corn
According to Act 153/2000 on GMO in the Czech Republic, Bt corn was registered for release on the market, which means for import and commercial growing after a three-year period of field trials. The registration has not gained legal force yet since Greenpeace (as a civic association part of the registration process) appealed. See GAINS report EZ3015 or more information on the biotech regulatory environment.
Consumption
Domestic corn is used mainly for feeds due to its quality specification. Corn for human consumption is imported. However, a slight increase in use of domestic corn in food production is expected in MY 03/04.
Trade
The Czech Republic turned into a net exporter of corn in the past few years. Corn imports are quite low and mainly used for food production and seeds. Over 36,000 MT was exported between July and October 2003. Exports in 1,000 MT went to: Poland 14, Germany 13, Netherlands 5, Switzerland 2, Austria 1, smaller amounts to Hungary and Slovakia.
In the same time period, around 700 MT was imported: 350 MT from Slovakia, 130 MT from France, 100 MT from the U.S., 50 MT from Poland, 40 MT from Argentina, 40 MT from Hungary, and 23 MT from Germany.
Prices
In MY 02/03, prices dropped significantly, however, due to lack of feed grain in MY 03/04 prices are expected to rise again to around $130-140 toward the end of CY 2003.
Oats
Area, yield, production
This was due to a dropping out in other grains such as wheat. The yield at 3.10 was the best in four years. Both area and yield contributed to significantly higher oat production exceeding 240,000 MT.
Consumption
High oat production in MY 03/04 will suffice for domestic use in food production (27,000 MT). The rest will be used for feeds (an increase by 70% compared to the previous year) partially replacing wheat.
Trade
Oats are not imported. Oat exports between July and October 2003 exceeded 4,000 MT. Oats were exported to (in 1,000 MT): Poland 1.4, Slovenia 1, Switzerland 0.9, Germany 0.6 and Austria 0.2.
Prices
In MY 02/03, prices fluctuated. However, prices are expected to increase only slightly (to around $120) in MY03/04 due to the lower grain production and higher oat production.
Rye
Area, yield, production
Rye production increased in MY 03/04 by 32% to 157,000 MT mainly due to its long-term insufficiency on the market and its resistance to low temperatures. However, its unpredictable quality prevents it from larger growing. Rye area increased only by 19% to 42,000 ha, which shows much better yield 3.76 than last year. Rye is an exception among grain for its sustainability during cold winter.
Consumption
Rye is mainly used in the milling industry. In MY03/04, the trend for lower use of rye in feeds will continue.
Trade
Rye has to be imported to cover domestic consumption. Between July and October 2003, around 20,000 MT was imported, mainly from Belarus and Russia. Total MY 03/04 imports should be around 40-50,000 MT.
Prices
Domestic price of rye will stay at its current level of around $140-150 this marketing year.
Rice
Trade and Consumption
The Czech Republic does not produce any rice. In MY 02/03, it imported 58,000 MT and exported 8,000 MT. Domestic consumption is constant at around 50,000 MT. In the first four months of MY03/04, imports exceeded 18,000 MT and exports amounted to 3,000 MT.
Imports come mainly from Asia (India, China, Pakistan, Thailand, Vietnam), but also from southern Europe (Italy, Spain). Imports from the United States are marginal with only 1,000 MT being imported last year. For MY 03/04, only 200 MT has been imported due to higher prices. Following the Czech Republic's accession to the EU in May 2004, higher quality rice will gradually replace cheaper low quality rice.
(Exchange rate: December 2003: 1$ = 26.7 CZK)
