September 18, 2013

Global wheat trade, projected for the 2013-14 (July-June) international trade year, is up 0.5 million tonnes, at 152.4 million tonnes, while export projections for several countries are adjusted this month, driven by production changes and shifts in competitiveness.

EU-27 export prospects are up 1.0 million tonnes, at 23.0 million tonnes as supplies are ample, and the pace of licenses is the strongest in 10 years (4.5 million tonnes of soft wheat since July 1). Romania is aggressively exporting to Egypt and France is expected to take over the Egyptian business as Romanian supplies dwindle.

France is also currently exporting to China, Algeria, and Saudi Arabia. A sharp increase in wheat supplies for Canada this month, high-quality wheat in particular, makes the country a strong competitor.

Canadian exports are projected up 0.5 million tonnes this month at 20.5 million tonnes, the highest in almost two decades. Partly offsetting are reductions in wheat export prospects for the UAE, which is down 0.4 million tonnes, as well as Paraguay and Uzbekistan, which are both down 0.3 million tonnes.

The reduction in Paraguay reflects lower projected wheat supplies this month, while the changes in UAE and Uzbekistan, in the absence of fresh information, match the confirmed 2012-13 final results. Wheat imports increased 0.5 million tonnes this month for both Egypt and Iran, and by 0.2 million tonnes for Brazil.

Egypt has been tendering aggressively since July, intending to replenish the country's wheat stocks to provide subsidised bread to about a quarter of its population who live below the poverty level. In order to help the currency strapped country, several Arab countries like Saudi Arabia, UAE, and Kuwait, pledged monetary support for Egypt.

Iran is expanding its outreach for grain imports, buying wheat originating in Russia and transported in small lots by barges from the Azov Sea/Don River and via the Volga River terminals into the Caspian Sea as it has a smaller projected crop. Iran is also expected to import more wheat from Kazakhstan in the current season, given the projected Kazakh bumper harvest.

Reflecting expectations of a low quality crop, imports in Brazil are projected to rise by 0.2 million tonnes, due to frosts in July and August, and higher wheat feed use.

Partly offsetting are reductions in wheat imports for South Korea and Saudi Arabia, down 0.5 and 0.3 million, respectively. US trade year imports are up 0.2 million tonnes at 3.7 million tonnes this month, on the expectation of larger durum and spring wheat imports of high quality from Canada.

This month, US 2013-14 forecast exports are unchanged with exports being very strong in the first months of the season. However, larger wheat supplies in major competitors are expected to put pressure on US sales, which are projected at a more modest pace in the later part of the year.