January 22, 2010

 

Black Sea wheat suffers drop in prices

 
 

According to a senior industry executive, Black Sea wheat prices are likely to be under pressure this year amid large inventories and may test US$155-$160 a tonne, free-on-board.

 

Milling-wheat of Black Sea origin is currently being offered around US$178/tonne, FOB.

 

"The European Union and Black Sea wheat surplus for 2010-11 is large, the total grains situation is comfortable too and can ensure lower flat price testing US$155-$160 lows," Mohamed Aboul Kheir, senior trader, Cargill International SA said addressing the World Grains Trade Summit here Wednesday (Jan 20) organised by Centre for Management Technology.

 

Kheir added that exchange rates to the US dollar will play a major role to define the floor price in the Black Sea cash market. Many countries which were importing wheat in 2008 are either no longer in the market or have reduced their purchase, it has brought down the global trade in milling wheat to 102 million tonnes in 2009-10 from 114 million tonnes year-earlier.

 

Geneva-based Mohamed forecast in 2010-11, global milling wheat trade is unlikely to recover and is expected little change at 102-103 million tonnes. He said ending-stocks of wheat in the Black Sea region are projected at 22 million tonnes this year up from 16 million tonnes in 2008-09, which will ensure a smooth transition to the new crop from the old crop.