Black Sea wheat back in the world market

BakingBusiness.com, July 12, 2011
by Jay Sjerven

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Just days after it lifted its nearly one-year ban on wheat exports, Russia sold 150,000 tonnes of hard milling wheat to Jordan and 180,000 of soft milling wheat to Egypt. The sales pressured wheat prices in the European Union and the United States. The return of Russia to the export market was long anticipated given vastly improved crop conditions in that nation compared with last year. Nevertheless, the large sales could not help but shake up the wheat trade.

The International Grains Council in its June 30 Grain Market Report forecast Russian wheat production this year at 54 million tonnes, up 12.5 million tonnes, or 30%, from 41.5 million tonnes last year, when a historic drought ravaged grain crops. While up sharply from 2010, Russian wheat production this season was expected to fall well short of the 61.7 million tonnes harvested in 2009 and the record 63.8 million tonnes harvested in 2008.

The I.G.C. forecast Russian wheat exports in 2011-12 at 9.5 million tonnes, up 5.7 million tonnes, or 150%, from 3.8 million tonnes in 2010-11. Russian wheat exports were a record 18.8 million tonnes in 2009-10 and reached 18.3 million tonnes in 2008-09.

Ukraine, which banned wheat exports during much of 2010-11, also was prepared to resume selling wheat. A Bangladesh official said last week Ukraine offered to sell his government 100,000 tonnes of milling wheat.

The I.G.C. forecast Ukraine to harvest 21 million tonnes of wheat this year, up 4.2 million tonnes, or 25%, from 16.8 million tonnes in 2010. The Ukraine harvested 20.9 million tonnes of wheat in 2009 and a record 25.9 million tonnes in 2008.

The I.G.C. forecast Ukrainian wheat exports in 2011-12 at 10.5 million tonnes, which was up 6.7 million tonnes, or 176%, from 3.8 million tonnes in 2010-11, and even higher than the forecast Russian wheat outgo in the current year.

Kazakhstan also will increase its wheat exports this year, according to the I.G.C. That nation was forecast to export 6.8 million tonnes of wheat in 2011-12, up 1.6 million tonnes, or 31%, from 5.2 million tonnes in 2010-11. Kazakhstan exported 8 million tonnes of wheat in 2009-10.

These Black Sea nations were collectively forecast to export 26.8 million tonnes of wheat in the current year, well above the forecast for the European Union-27 at 15.1 million tonnes and compared with the forecast U.S. export volume at 30.5 million tonnes.


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