November 17, 2011
Black sea wheat exports to weaken next season
Black Sea wheat exports over world market will weaken next season because of a dip in production, especially in Ukraine caused as autumn sowings had a poor start.
AgResource, the US consultancy, in its first estimates for the world wheat harvest next year pegged it at 682.6 million tonnes, down 700,000 tonnes on the 2011-12 result.
However, the modest decline disguised larger declines forecast for Black Sea states whose lifting of grain export restrictions, coupled with a marked rebound in output from last year's drought-affected result, has driven steep rises in shipments, notably Russia's.
The extent of Russian exports, set to hit a record this year according to the International Grains Council, is testing the limits of its infrastructure, with rail bosses this week curbing deliveries to the main grain port of Novorossiisk.
And, with Black Sea countries noted for price competitiveness, their strong exports this year are seen by many observers as a significant pressure to prices.
AgResource director Dan Basse, estimated Russian exports easing one million tonnes to 17 million tonnes in 2012-13, on a harvest pegged at 57 million tonnes.
Ukraine's shipment will fall two million tonnes to six million tonnes, reflecting a cut in output to 18.5 million tonnes.
The country this year reaped a wheat harvest of 22 million tonnes, Serhiy Kvasha, the head of the markets department at Ukraine's farm ministry, said.
However, poor crop condition caused by a dearth of rain has provoked fears that up to 30% of winter grain sowings for the 2012 harvest may need to be replanted, with farmers also disgruntled over political uncertainties, the latest over a bill allowing the sale of farmland.
"In this context, Ukrainian farmers will likely limit agricultural investments in the coming months," Agritel's Kiev office said.
Basse forecast European Union wheat shipments staying steady at 15.5 million tonnes, with the export share lost by the Black Sea picked up largely by the US which would see shipments rise to 28 million tonnes.
The USDA estimates domestic exports at 26.5 million tonnes this season.
The increase would come on the back of a harvest of 56.1 million tonnes, up from production this year pegged by the USDA at 54.4 million tonnes.