November 21, 2008

Black Sea grain exports can supplement world demand


The Black Sea region with its large portions of uncultivated land, could help make up for the dearth of grain supply to meet the increased demands of developing countries.


Even as demand for grain shrivels in recession-hit United States and Europe, fast-developing countries like Brazil, Russia, India and China may more than offset the drop. Following this, the increasing demand for meat means that grain-based animal feed consumption is also on the rise.


US analyst Dan Basse, head of AgResource said that the world would have to rely on the Black Sea for the extra 16 to 17 million hectares of farmland needed to churn out grains to feed world demand.


In fact, about 35 to 40 million hectares of extra land that can be cultivated in Russia, Ukraine or Kazakhstan and a potential for grain yields to rise could push the region to the forefront of the world export market in the next five to 10 years, analysts said.


But there are limitations such as infrastructure and unstable weather to deal with, before the Black Sea countries could overtake United States, the world's largest grain exporter.


Geneva-based analyst James Dunsterville of AgriNews said that more investments would have to be injected into interior infrastructure and for Russia, in export facilities.


Another limiting factor would be rising internal demand and Russia's push to increase livestock herds, a move that would eat up a lot of domestic feed wheat supplies and cut down the exportable surplus, analysts said.

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