However, Asian customers had switched from longterm supply contracts to hand-to-mouth buying, Rogers said in a paper for the Australian Bureau of Agricultural and Resource Economics (ABARE) Outlook '99 conference. This had occurred as a result of changed circumstances with a serious impact from the region's currency crisis, he said. Rogers used his address to strengthen AWB's attack on the food aid donation programme of the US, which has allowed US wheat to make inroads into traditional Australian markets for wheat in Asia.

The decline in the international grain market over the past 12 months had put enormous pressure on the US government to be seen to be doing something to help the country's farmers, Rogers said. How the US government reacted would be critical to the health of theglobal grains market, he said.

"Unfortunately, the administration of the food aid donation programme to date, particularly with regard to the impact on commodity sales to recipient markets, does not give us a great deal of encouragement," he said.

The use of less obvious forms of support by governments for their wheat industries had become increasingly apparent, in the form of food aid, uncommercial credit arrangements and other domestic support programmes, he said. This has put considerable gains in jeopardy which could be expected in the next round of World Trade Organisation (WTO) negotiations, unless those forms of support could be addressed.

The new round of WTO negotiations was likely to be far more complicated than the Uruguay Round Agreement, he said. "While the Uruguay Round sought disciplines on what were fairly transparent or obvious forms of government support mechanisms, in the years since its conclusion the use of other, less obvious forms of support has become increasingly apparent," hesaid. On the world wheat market, Rogers said high stocks, subdued export sales and historically low prices produced difficult marketing conditions which were likely to translate into a lower production response in 1999-2000, he said.

This was despite a forecast drop in total wheat end stocks for 1998-99, he said. Signs of this were emerging with a USDA plantings survey revealing that US growers would plant their smallest winter wheat crop since 1943, he said. A similar impact was expected on the area devoted to wheat by the European Union in 1999-2000. Rogers did not forecast Australia's 1999-2000 (April/March) likely wheat area nor production. As earlier reported, ABARE forecast Australian 1999-2000 wheat output would rise slightly to 21.27 million tonnes from 21.11 million tonnes in 1998/99.

Rogers said that while the Asian crisis had an undoubted impact on demand and growth forecasts, currencies appeared to have stabilised to some degree and some sense of normality was returning to the region.Underlying fundamentals of population growth, urbanisation and changing dietary requirements still remained strong, he said. These factors promoted a swing away from traditional diets toward wheat and meat-based diets in the medium to longer term, he said.