March 12, 2009

Russia and Ukraine are capturing the growth in world wheat demand this year as both countries are projected to export record quantities, the USDA said in its monthly "Grain: World Markets and Trade" report.

 

Although most major exporters (except Argentina) have ample exportable supplies, Russia and Ukraine's comparative freight advantages, combined with very aggressive pricing, have enabled them to expand in areas usually dominated by other suppliers.

 

Reduced exportable supplies from Kazakhstan, which normally compete for Black Sea port facilities, have also enhanced Russia and Ukraine's shipping flexibility and competitiveness.

 

Russia has already exported significant quantities to the Middle East, as well as expanding its market share in Egypt. Ukraine has exported significant quantities of feed-quality wheat to the EU and Israel, and as far away as the Philippines and South Korea.

 

Meanwhile, ending stocks for Australia, EU, Canada and the US are expected to jump by 20 million tonnes or 60 percent from last year's extraordinarily low levels. Those projected larger stocks will thus provide a buffer to potential crop shortfalls and help moderate world wheat prices.

 

 

Australia is up 500,000 tonnes to 13.5 million due to a larger crop.

 

China is cut in half to 750,000 tonnes, the lowest in 8 years, as exporters' competitive position is eroded by the effects of the export tax and the removal of a VAT rebate.

 

EU is raised 500,000 tonnes to 19.5 million, the highest in nearly a decade, based on the continued strong pace of export licenses.

 

Russia is raised 1.0 million tonnes to a record 16 million, based on the continued strong pace of sales to nearby countries.

 

Ukraine is up 500,000 tonnes to a record 10.0 million, with the due to continued strong pace of exports, particularly of feed-quality wheat.

 

The US is reduced 500,000 tonnes to 26.5 million due given the increased competition and slowing sales.

 

 

Azerbaijan is up 300,000 tonnes to 1.3 million due to the strong pace of imports, particularly from Russia.

 

Brazil is cut 500,000 tonnes to 6.0 million as import demand is shifted into next year.

 

Indonesia is reduced 300,000 tonnes to 5.3 million with a slower-than-expected pace of imports.

 

Iran is raised 1.5 million tonnes to 7.0 million based on the strong pace of shipments and the government's reported intention to build stocks.

 

Morocco is reduced 300,000 tonnes to 3.5 million in anticipation of a larger wheat crop.

 

Turkey is raised 300,000 tonnes to 2.3 million based on the strong pace of imports, particularly from Russia.

 

US is up 300,000 tonnes to 3.1 million with strong purchases of durum and spring wheat from Canada.