December 2, 2014

Weaker euro boosts EU wheat export

The euro's slide against the dollar has improved the 28-nation bloc's chances of increasing its export of soft wheat as it expects to ship 30 million tonnes of the grain this season, according to an updated outlook posted online by the European Commission. The forecast is 2 million tonnes higher than that made a month ago.

As of November 25, the EU's licences to export soft wheat during the current season, which began July 1, were equivalent to 12.02 million tonnes as against the 11.2 million tonnes during the same period last year, data showed.

According to a Bloomberg report quoting Sebastien Poncelet, a consultant for Paris-based farm adviser Agritel, the EU is "nearly 1 million tonnes ahead of last year, and almost halfway through the campaign," thanks to the euro's "big push in the back." The euro's 8.8% decline against the US dollar since the start of the crop year on July 1 has also contributed to France's and Romania's acceptance of tenders offered by Egypt, the world's biggest wheat importer. Egypt last bought US grain on September 22.

While the EU is exporting more wheat, Russia and Ukraine are holding on to their supplies, as the ruble and the hryvnia dive, according to Poncelet. 

The EU on Thursday, November 1, cut its estimate for soft-wheat inventories for the current season to 13.7 million tonnes from 15.41 million tonnes, still higher than the 8.24 million tonnes at the end of last season.