May 25, 2010

Black Sea states to surpass US in wheat exports


Kazakhstan, Russia and Ukraine look set to raise wheat exports by one half to more than 50 million tonnes by the end of the decade, overtaking US, the biggest exporter since World War II, according to a USDA report.


US's share of world wheat exports will fall to 16% from an average of 24% over the last decade, with Canada and Europe, although not Australia, also set to lose ground.


However, such forecasts could fall foul of the weaker wheat prices which a jump in Black Sea harvests may cause, or of a dearth in transport and elevator space, especially in the outlying regions whose adoption of grains would be crucial to raising output.


Furthermore, attempts to reverse a dramatic decline in livestock production since Soviet times, when the region imported grain and oilseeds, may soak up domestically considerable quantities of grain.


"Of all the major grain-producing countries, Russia, Ukraine, and Kazakhstan appear to have the most potential to substantially increase wheat production and exports," the USDA said.


"Yet uncertainty exists as to the degree to which the three former Soviet Union countries will increase their wheat exports."


The briefing also flagged doubts over the nations' reliability as exporters after attempting to restrict or ban shipments during the 2006-08 spike in farm commodity prices.


Increased sowings provided much of the scope for the Black Sea states to raise production, while yields will also rise, helped by increased use of fertiliser and the expansion of efficient corporate farms. Russian yields are expected to jump by 20% by 2019, and those in Ukraine by 17%.


Improvements over the past decade had also been helped by benign weather and a switch to autumn sown wheat, which typically yields more than spring-planted grain.