July 19, 2011


Black Sea Wheat exports set to jump 40%



Wheat exports from the Black Sea region are set to jump as much as 40% this month as buyers seek cheaper supplies from Russia and Ukraine, according to grain trader Nidera SA.


Shipments from the countries and Kazakhstan may reach 3-3.5 million tonnes in July, said Francesca Kleemans, director of strategy and research at the Nidera Handelscompagnie BV trading arm. That compares with 2.5 million tonnes a year earlier.


"In the Black Sea area, we are going to see a huge crop," Kleemans said. "It's going to come out, and it will find good buyers. All of those who haven't bought are lining up."


Russia and Ukraine resumed grain exports this month after imposing restrictions in 2010 as a drought led to crop losses. Egypt bought Russian-grown wheat this month for the first time since last year. The eastern European country has a cost advantage of as much as US$40 a tonne over wheat from the US and western Europe, according to Paris-based farm adviser Agritel.


"The effect of the Black Sea crop is priced in," Kleemans said. The "Black Sea crop will find very eager buyers, but I think the next turn of the story is the rainy weather in Europe and whether this might create some more availability, especially of feed-quality wheat."


Egypt agreed to buy a total of 360,000 tonnes of Russian wheat in two tenders this month. Nidera, which is based in Rotterdam and has roots going back to 1920, will deliver 120,000 tonnes of that amount.