Iran's commerce minister said last week that price subsidies on basic foods and commodities would be fixed for two years, the official Iranian news agency IRNA reported. "The price code set by the government for basic commodities will be fixed for a period of two years and the government is responsible to check any possible hike," IRNA quoted Mohammad Shariatmadar saying. The minister told reporters that the government would pay 6.75 trillion rials ($2.2 billion) this year for subsidies on basic commodities, such as bread, rice, sugar, vegetable oil and wheat.

Bears dominate wheat

Australian milling wheat markets had been dominated by an increasingly bearish international market outlook, the Australian Wheat Board (AWB) said in its weekly grain market report. Recent rains had given many growers the confidence to forward contract more of their crop, but just as big a motivation had been an expectation that international prices were on the way down and would notrise above current levels at harvest, the AWB said.

Sorghum markets had been dominated by the poor outlook for corn and a weaker Australian dollar. Effectively there had been little change in the market, it said.

AWF boosts wheat forecast

Private forecaster Australian Wheat Forecasters Pty Ltd (AWF) boosted its forecast of Australia's 1998/99 wheat crop to 21.38 million tonnes. This is up on AWF's previous forecast, issued last month,of 20.75 million tonnes, and compares with last year's production of 19.05 million tonnes. The AWF forecast compares with a forecast of 19.3 million tonnes by the Australian Bureau of Agricultural and Resource Economics, issued in June. Since then trade forecasts of the crop have been rising and ABARE has indicated it is likely to increase its forecast in its September crop report.

Philippine sugar to stay high

Philippine sugar imports could temporarily ease a shortage but prices are likely to stay relatively high, industry executives said last week. ThePhilippines might also be forced to import more sugar in the next crop year, starting September 1, if crops suffer damage from the La Nina weather pattern, which brings torrential rains and foods. The government recently approved the import of some 200,000 tonnes of raw sugar for delivery this and next month because of robust demand from the beverage sector. This purchase will take the Philippines back into the sugar import market after two years of glut.

South Korea's KFA to buy soyameal

The Korea Feed Association has invited tenders to buy 20,000 tonnes of soyameal, traders said last week. Shipment was set for September 7-26 if sourced from the US Gulf or South America with arrival by October 30 to the Port of Inchon.

Australia not to buy Indonesian sugar

Australia's monopoly raw sugar exporter Queensland Sugar Corp (QSC) confirmed last week that it had not won sales in Indonesia's latest sugar tender. QSC had participated in the tender mainly because of the long-term importance ofIndonesia as a sugar market, a QSC spokesman said. It was understood that the successful offerors were the Hong Kong-based Kerry group, controlled by the Robert Kuok family, France's Sucden group and Indonesia's Bahtera group, he said. Australia had already sold more than 75,000 tonnes of raws to Indonesia during 1998 and sold about 20,000 tonnes in Indonesia's last tender in recent weeks, he said.

Vietnam rice trade at standstill

Vietnam's rice trade has been at a standstill last week on rising prices following a recent devaluation of the local dong currency, traders said. They said the 9.1 per cent devaluation of the official dong rate last Friday had given little boost to rice exports because farmers were now holding back stock on the expectation they could get better local prices. Traders had hoped the devaluation would improve Vietnam's competitiveness against rice exporters such as Thailand. "Farmers have decided to hold back grain so export prices are jumping instead of dropping as weexpected," one dealer in southern Ho Chi Minh City said.

China rice crop hurt by floods

Floods in China have hurt the rice crop but the extent of damage remains unclear, traders said last week. Traders' estimates of damage to the crop ranged from five to 20 per cent, and some said this could mean less exporting of rice by China this year. "The rice crop has been hurt, that's for sure," one trader said. "I would say the damage is probably around 10 percent, but no one has got an exact figure." Besides the damage to the fields, rice stored in government silos in the Yangtze River region could have been affected, traders said. Efforts at flood control and rescuing victims tied up manpower and interfered with planting the second rice crop, one trader said.

Australia to export durum

Australia seems poised to make inroads into the world's premium pasta market, Italy, with durum exports. A statement by AWB Ltd, the re-named Australian Wheat Board, said last week it seemed that Italian millerswere prepared to pay a premium for Australian No. 1 durum and were prepared to establish a long-term relationship with AWB to ensure supplies. AWB's durum merchant Stuart Richardson, who has just returned from Europe where harvesting of the durum crop has finished, said the Italians were "extremely interested" in Australian No. 1 Durum.

`Agreement on sugar invalid'

Documents relating to a 1993 Nafta "side letter" agreement covering sweetener trade between the United States and Mexico are not valid, a Mexican government aide said last week. "In our view, they were not duly signed and there was no meeting of the minds," Luis De La Calle, a trade official at the Mexican Embassy in Washington, told sugar growers at their annual meeting here. Both sides agree that the North America Free Trade Agreement (Nafta) currently allows Mexico to ship 25,000 tonnes of low- import-duty sugar annually into the US market. But there is sharp disagreement over what is supposed to happen in 2000, which is year seven ofthe Nafta pact.

Indonesia buys olein

Indonesia's commodity regulator Bulog said last week it has bought 44,164 tonnes of olein from private companies and state plantations through a fresh tender to boost domestic cooking oil supply. It was the third tender carried out by Bulog since late July to stabilise prices of cooking oil which had soared because of tight supply triggered by an export boom of crude palm oil (CPO). The first tender was held on July 28 and the second on August 4.

Olein, which is used as cooking oil, is the refined form of CPO. "We bought 44,164 tonnes of cooking oil from private companies and state plantations through a tender today. It is worth 220 billion rupiah," Bulog chairman Beddu Amang told reporters.

Japan to boost soyabean production

Japan's agriculture ministry said last week it plans to increase domestic production of soyabeans to around 250,000 tonnes per year by 2005 from the current 150,000 tonnes. The move reflects growing demand for domesticsoyabeans from processed food makers such as soyabean curd tofu producers who want to respond to consumer concerns over the safety of imported genetically altered soybeans, a ministry official said. The ministry also hopes to stabilise production which has fluctuated in recent years, he said. "End-users hope to use more domestic soybeans if output is stable.

Basically, the quality of domestic soybeans is good," an official of the ministry said.

Indonesia to buy sugar

Indonesian state commodities regulator Bulog will tender for 100,000 tonnes of white sugar and 400,000 tonnes of raw on Wednesday, chairman Beddu Amang said last week. "We are going to buy 100,000 tonnes of white sugar and 400,000 tonnes of raw sugar through tender tomorrow," Amang told reporters. He gave no further details.