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Wheat: Stepping up shipped volumes to EU markets

January 10, 2018 at 9:48 AM , Starry Night Ltd.
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SOFIA. Entering into 2018, the country went over 3.0 mmt of exports. The upbeat export trend, supported by high quality characteristics of grains, might well push prices higher soon.

Wheat: the robust export rate to EU markets is slipping over into 2018

BULGARIA. By the 5th of January 2018, local exporters shipped to the world 3,043,485 mt, which represents a share of 51.58% of aggregate output from harvest 2017-18. The majority of sent quantities (86.39%) abroad went to EU countries while the remaining volumes were shipped to the rest of the world. During the last marketing season, local market players really made it big since exports, which came to 73.62% of total output, were never so high. However, during the current season, they seem to be even in a more advantageous position. By the very beginning of 2017, the country managed to export 2,007,549 mt to EU countries while by the 5th of January 2018, shipments to the same destinations reached 2,629,289 mt, or by close to 31% more.

       Harvest 2017-18

(01.07.2017 - 05.01.2018)

           units in MT

Beginning availability

179,000

Aggregate output

5,900,000

Imports

46,358

Domestic consumption

968,000

   food

512,000

   feed

258,000

   seeds

180,000

   industrial usage

18,000

Exports to the world

3,043,485

   to EU markets

2,629,289

   to rest of the world

414,196

Source: Bulgarian Ministry of Agriculture

Who fears the regional behemoths?

Local market sentiments do not underestimate the export potential of big regional players such as Russia and Ukraine within the Black sea basin, but demand for locally grown wheat by EU member states, especially by those whose harvests suffered because of adverse weather conditions, is expected to keep its momentum strong. The characteristics of this year’s wheat are much better than those of the previous season, which means that quality of the crop is not an issue at all. And, although Russia has extended its strong grip on the export front so far -- most probably, it will become the largest exporter of wheat for the current season, -- local market players seem in no hurry to massively unload their reserves. They do not fear a bearish trend down the road. Instead, they seem quite confident about their EU destinations’ export potential. Indeed, prices of high quality wheat might well find support in the unquenched international demand, and the trend seems far from reversing.

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