Taylor Scott International News
A US forecast that the European Union will lift its wheat exports to 23.0m tonnes this season, the third highest on record, is based on ideas that France will take up the baton on supplying Egypt. Romania, on the European Union side of the Black Sea, has proved the major shipper to Egypt, so far in 2013-14, chalking up orders of more than 800,000 tonnes, out of the 2.1m tonnes ordered by the top importing country. That is more than orders from Russia, which has traditionally dominated early-season orders by Egypt’s Gasc grain authority, and Ukraine, also known as a fierce competitor on international markets. And Gasc looks likely to turn largely elsewhere in the EU for supplies once Romania, a relatively minor producer, exhausts its exportable supplies, the US Department of Agriculture said. ‘France expected to take over’ “Romania is aggressive exporting to Egypt, and France is expected to take over the Egyptian business as Romanian supplies dwindle,” the USDA said. This is at a time when Egypt has been “tendering aggressively, intending to replenish the countries’ wheat stocks to provide subsidised bread to about a quarter of its population who live below the poverty level”. While Egypt has run into economic problems, and ran down its stocks in 2012-13 in an effort to save cash, “several Arab countries – Saudi Arabia, United Arab Emirates and Kuwait – pledged monetary support for Egypt to aid the currency strapped country whose trade deficit is widening”. However, French supplies at the latest Gasc tender closed the gap with offers from the Black Sea exporters. The USDA also flagged that France has been exporting to China, Algeria and Saudi Arabia, helping EU wheat exports, as measured by licences, hit 2.5m tonnes since 2013-14 began at the start of July, the fastest pace in 10 years. Squeeze on quality wheat The comments came as the USDA expanded on the reasons behind an upgrade last week of 1.0m tonnes to 23.0m tonnes in its estimate for EU wheat exports this season, besides lifting by 500,000 tonnes to 9.5m tonnes its forecast for Egyptian purchases. However, they also sharpen ideas of the uneven availability of high quality wheat, which is seen as abundant in the EU, as flagged separately by trade comments on UK wheat dynamics , but tight in many other geographies. High-quality wheat “is expected to be in short supply this year”, the USDA said, echoing comments from the likes of Australia’s Abares crop bureau and Macquarie . ‘Moisture content too high’ Indeed, Russia is viewed as having slender supplies of high quality wheat, after rains at harvest in the central region, and most lately in Siberia, where it had been hoped that a strong spring wheat crop would bolster supplies. “Russia is struggling with wet conditions on the tail end of their wheat harvest, which has raised more concerns about the overall quality of the Russian crop,” Brian Henry at US broker Benson Quinn Commodities said. In Siberia, “fields are still wet, which complicates the access of the farmers,” Agritel said. “Furthermore, the moisture content of the grains seems still too high,” a worry as it encourages sprouting which can render wheat unfit for milling, besides making storage difficult if the grain is not dried. However, “the weather conditions are getting better”, Agritel said. SovEcon, the Moscow-based consultancy, has warned of a “significant decline” in Russian grain exports this autumn, thanks to higher prices encouraged by the shortage of high quality grain. French hopes Hopes for French wheat exports, by contrast, are buoyant, with the official FranceAgriMer bureau last week forecasting an 11% rise to 11.0m tonnes in shipments outside the EU this year, and many traders believing the result could turn out higher still. France in 2012-13 shipped 17.1m tonnes of wheat, 9.9m tonnes to buyers outside the EU. Taylor Scott International
Taylor Scott International, Taylor Scott
