Wheat: Reverberating effects from regional market players and those from earlier weather conditions on local export results
January 25, 2018 at 9:09 AM ,
Starry Night Ltd.
BULGARIA. The country does not have the market clout regional behemoths such as Russia and Ukraine, for instance, do in markets outside the EU. Anyhow, a further comparison should not be limited or viewed in the light of production and export potential, as well as competitive prices, only.
Wheat: On markets outside the EU, local exporters suffer from competitive forces within the Black sea basin
Usually, it is the magnitude of production that determines the rate and bulk of exports, ceteris paribus. As indicated in the most recent USDA report on Grain: World Markets and Trade, Russian’s wheat output has been estimated to have reached the amount of 85 mmt or by 12.5 mmt higher on a yearly basis. Such a bumper crop has already positioned the country for reaching new export horizons during the current market season, which might well catapult it to the top position of a leading world exporter this year. A case in point, as stated in the aforementioned report, “Russia’s wheat sales are booming to Egypt,” which is a major export destination.
As a result, since the beginning of the current marketing season, Bulgarian exporters have missed substantially on market opportunities in countries outside the EU. For instance, by the 20th of January 2017, the country exported 1,082,132 mt to markets outside the EU while by that time this month, shipped volumes reached 414,196 mt – the difference is close to 62% in favor of the previous marketing season. The reverberating effects of such regional developments will surely echo throughout the whole marketing season.
|
Harvest 2017-18 (01.07.2017 - 19.01.2018) units in MT |
|
|
Beginning availability |
179,000 |
|
Aggregate output |
5,900,000 |
|
Imports |
46,358 |
|
Domestic consumption |
997,600 |
|
food |
550,000 |
|
feed |
278,000 |
|
seeds |
180,000 |
|
industrial usage |
19,200 |
|
Exports to the world |
3,123,810 |
|
to EU markets |
2,709,614 |
|
to rest of the world |
414,196 |
Source: Bulgarian Ministry of Agriculture
Following the path of less resistance, instead
According to the Ministry of Agriculture, by end of last week, the country exported, via Varna sea port, 1,476,956 mt of wheat, which on a year-to-year basis stands by 8.9% higher. Export to EU markets, by the 19th of January 2018, reached 2,709,614 mt or by close to 30% higher than shipped volumes from last year. The steep rise is the result of weaker harvests in some countries of Western Europe, for instance, Spain. According to local exporters, the buoyant export trend to EU markets is expected to continue to at least the end of February 2018.
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