Wheat. World Markets and Trade. January 2018 – USDA Янв. 12, 2018
Rising Russian Grain Supplies Drive Record Exports
With bumper supplies, Russian grain exports overall are forecast to reach record levels in 2017/18. The expansion is primarily driven by record wheat exports, set to exceed both the United States and the European Union. Corn and barley exports are forecast to be the second-highest on record. Russian barley and wheat exports each account for nearly one-fifth of global trade, while corn exports account for a small share in the world market.
Russia’s ability to export has been assisted by favorable exchange rates and low prices compared to other traditional wheat and barley exporters. Another key advantage is geographic proximity to rapidly growing markets in the Middle East and North Africa. Recent investments have been made in Russian port capacity, and the country has the flexibility to use smaller vessels to accommodate infrastructure constraints in nearby countries. Ports on the Black and Caspian Seas give it easy access to the Middle East and North Africa where feed demand has grown in burgeoning poultry industries. Russia’s wheat sales are booming to Egypt, the top importer, while barley exports are strong to Iran, Saudi Arabia, and Libya. Plentiful supplies have enabled it to expand exports to reach markets farther afield in Africa, Asia, and even to Mexico, demonstrating Russia’s growing influence in the global grain market. See pages 5 and 20 for additional details.
As recently as the early 2000s, Russia was a net grain importer. Even as its production grew, its reliability as a global exporter was uncertain. For example, from time to time the government enacted export bans – often on short notice – to secure domestic supplies when production was low. In the past few years, production has expanded rapidly with higher yields, particularly for wheat and corn. Because of surplus production, the government is now supplying a much more supportive framework for exports. Just last month, the Russian government began providing subsidies to facilitate grain transportation from production regions.
For 2017/18, global production is raised to a new record based on a larger crop for Russia. Global trade is forecast down slightly from last month but remains a record. Imports are forecast higher for China but lower for Algeria, India and Saudi Arabia. Higher exports for Argentina and Russia are offset by lower forecasts for Australia and the European Union. The U.S. seasonaverage farm price is unchanged at $4.60 per bushel.
Overall, U.S. wheat prices were up marginally during December on concerns over weather conditions in competitor countries. Soft Red Winter (SRW) rose slightly by $1/ton to $183, while Hard Red Spring (HRS) rose $3/ton to $277 and Soft White Winter (SWW) improved $3/ton to $200. Hard Red Winter (HRW) moved up $7/ton to $224 based on concerns of drought conditions in the Southern and Northern Plains.
Black Sea Region Gains Market Share from Traditional Wheat Exporters
The traditional major wheat exporters are Australia, Canada, the European Union (EU), and the United States, but in recent years the Black Sea region–Kazakhstan, Russia, and Ukraine – has emerged as a strong player in the global wheat market. Wheat from Australia, the EU, and the United States is marketed on its high quality, while the Black Sea has been successful at competing on lower price and location. This dynamic has increased competition rapidly and has affected all major suppliers in the global market. The Black Sea region will continue to challenge its competitors, with this year’s record crop in Russia dampening prospects for the traditional exporters.
Expansion of market share by Black Sea suppliers is most prominent in nearby price-sensitive markets. The United States has been affected by increased competition from the Black Sea, exemplified by the falling market share in Egypt, the largest wheat importer in the world, and Nigeria. Russia and Ukraine, combined, currently hold around 82 percent of the Egyptian market, while the United States only carries a 1 percent market share, down from 8 percent 5 years ago. Not only has the United States lost its share in the Egyptian market, it has also lost share in Nigeria. For decades, Nigeria purchased more than 80 percent of its import supply from the United States, buying mostly on quality. But with the down turn in the Nigerian economy, they turned to purchasing wheat more on price. Just 5 years ago, the United States supplied nearly three-quarters of wheat imports, with Russia only 1 percent. In 2016/17, those shares were radically different at 33 percent and 26 percent, respectively.
Australia primarily supplies Asia for wheat, since the variety of wheat Australia produces is excellent for local preferences. Over the last 5 years, however, Ukraine has gained market share in the Indonesian market, which is Australia’s main customer and the second-largest wheat importer. In 2012/13, Ukraine supplied just 1 percent of the Indonesian wheat imports; today its market share has reached 16 percent. Despite Indonesian preference for Australian wheat for its milling quality, the competitive price for Black Sea wheat has prompted increased purchases to blend with higher-quality milling wheat.
Alternatively, the impact on the European Union has not been as drastic as the Australian and U.S. market share. The European Union has been rivaling with the Black Sea region for market share. The European Union is competing heavily to regain its share of the Middle Eastern and African markets, after last year’s poor wheat crop. Canada as a high-quality exporter has seen relatively limited effects on its export market during this time period.
North Africa Wheat Consumption Growth Drives Imports
North Africa’s wheat imports continue to grow as the gap between consumption and production widen. Consumption growth in North Africa has been steady for much of the last decade at about 2 percent a year. Rising populations in the region have kept consumption growth on a steady upward trend. In many of these countries, bread is considered a staple with prices often subsidized by the government. This is especially the case in Egypt. Egypt accounts for nearly half of the region’s total consumption. Its subsidy system allows low-income consumers to purchase “baladi” bread at a low price, while other wheat-based products are available without subsidy through the private sector.
Wheat production across this arid region has shown very little growth as it is prone to large weather-induced fluctuations. For example, in 2017/18, Morocco rebounded from drought conditions, more than doubling production from the previous year. Egypt’s production has been relatively high in recent years with substantial government support. The policy, however, changed from governmentsupported prices to world prices, which would result in lower compensation and the possibility of reduced plantings.
Across the region, imports have filled the growing gap between production and growing domestic consumption. Egypt and Algeria, the world’s first-and third-largest importers respectively, represent about 70 percent of the region’s imports. More importantly, they represent nearly all of North Africa’s import growth over the last decade.
- Янв. 19, 2018 Новости рынка зерновых и масел Январь 19, 2018
- Янв. 17, 2018 Новости рынка зерновых и масел Январь 17, 2018
- Янв. 15, 2018 Новости рынка зерновых и масел Январь 15, 2018
- Янв. 12, 2018 Comparative tables of USDA data and market expectations - January 2018
- Янв. 9, 2018 Новости рынка зерновых и масел Январь 9, 2018
- Янв. 8, 2018 Новости рынка зерновых и масел Январь 8, 2018
- Янв. 5, 2018 Новости рынка зерновых и масел Январь 5, 2018
- Янв. 4, 2018 Новости рынка зерновых и масел Январь 4, 2018
- Дек. 18, 2017 Новости рынка зерновых и масел Ноябрь 18, 2017
- Дек. 12, 2017 Wheat. World Markets and Trade. December 2017 – USDA