Bulgaria. Grains and Feed Market Update. Nov 2015 Nov. 9, 2015
The first tentative post-harvest data on 2015 grain crops showed a higher than previously expected wheat production; barley production in line with earlier forecasts and much lower corn crop due to the summer heatwave. Ag Sofia has reduced its estimates for corn to 2.55 MMT from the previous 2.7 MMT. Corn harvest as of October 22 was reported to be completed on 75% of the area. Reportedly, grain exports in the current year are approaching 1.6 MMT for wheat, 280,000 MT of barley and 260,000 MT of corn as of end-October.
Due to unstable fall weather, fall planting of winter wheat and barley MY2016/17 is behind last year, however, favorable and dry weather in the second half of October is expected to allow catching up with planting within the optimum time. Wheat planted area is likely to go back to its average of 1.1-1.2 MHA or 10%-15% above the previous season.
Summer weather in the country was unusually hot and dry for two months in July and August.
Despite very good soil moisture reserves until mid/end June, the scorching temperatures had a very negative impact on corn yields. On the other hand, the dry weather secured faster harvesting of wheat and barley in July.
The hot summer was followed by timely rains and moderate temperatures in the fall which were welcome for the fall planting. The second half of September and October had a mix of dry and wet days with temperatures at average or slightly above the seasonal average. Precipitation improved, favoring soil moisture and planting of winter crops. On the other hand it hampered the harvest of corn and sunflower. In certain regions where rainfall was more frequent and above average in terms of precipitation, wheat and barley planting slowed down (Western Bulgaria). This unstable weather and alteration of dry and wet periods caused irregularities in planting and harvest progress. As a result, currently there are fields planted in early optimum time with very good growth and some that were just planted, so the yield expectations for MY2016/17 are mixed and close to average. The other weather effect was the delay of the corn harvest and the need for drying in select regions due to the extra moisture.
Grain Production and Supply
The fall planting of wheat and barley had uneven speed in different regions due to unstable weather. Overall, wheat planting was reported to be behind last year by 6.8% (550,000 HA planted) and barley planting behind by 12.4% as of October 22. At the same time, planting of other crops (rapeseeds, rye and triticale) is ahead of last year. Farmers made efforts to plant rapeseeds earlier in its optimum time due to plans to increase planted areas; and then focused on harvest of corn and sunflower which currently promise better profit potential than wheat and barley. Despite the delay in the planting, the last 10 days of October have been ideal for final planting within the optimum time window and it is likely that both wheat and barley planted areas will increase.
AgSofia estimate is that barley area is likely to be close or slightly above last year at 180,000-185,000 HA, and that wheat area will go back to its original average level of 1.1-1.2 MHA.
Progress in MY2016/17 Fall Planting as of October 22
Planted as of October 22, 2014 (HA)
Planted as of October 22, 2015 (HA)
Source: MinAg Bulletin#5 of October 29, 2015
In October, the MinAg published its first official post-harvest estimates for MY2015/16 wheat and barley crops.
Wheat harvest was carried out on time due to the hot and dry summer. The quality of the crop was reported to be better than in 2014, yields and production exceeded earlier estimates.
Despite initial expectations for lower yields due to heavy rains in the winter/spring and challenging and late planting in the fall of 2014, final yields were very good. Current estimates vary from 4.25 MT/HA to 4.5 MT/HA, and production estimates go as high as 4.85 MMT. Quality was reported to be better at over 50% milling wheat compared to 25% in 2014 due to the favorable weather. AgSofia's estimate for wheat production is at 4.7 MMT or slightly above the MinAg data.
Local seed wheat producers (research institutes) reported higher demand for imported planting seed over Bulgarian varieties. Imported varieties are reported to come mainly from Austria, France and Serbia, and currently account for about half of total wheat area. The trend has reportedly continued this fall.
Similar to wheat, the barley harvest was carried out under good conditions and many farmers reported yields exceeding wheat yields. For this reason, some industry estimates are much above the current MinAg data, up to 780,000 MT, with average yields of above 5.5 MT/HA.
AgSofia's estimate is for an area of 180,000 HA (winter and spring barley) and production of 740,000 MT (winter and spring barley), slightly above MinAg data.
Corn area estimates vary widely from 410,000 HA to 475,000 HA. Current MinAg data is for planted 425,000 HA of which 75% were harvested as of October 22 with reported average yield of 5.31 MT/HA and production to date at 1.7 MMT.
Current production estimates vary from 2.3 MMT (MinAg) to 2.6 MMT (industry sources), with most estimates at 2.4-2.5 MMT. Farmers have unanimously reported lower yields with a decline between 10% and 35% region to region, compared to the previous season when corn yields were exceptionally good. Most farmers reports are in the range of 4.5-5.5+ MT/HA.
Current AgSofia estimates are at the upper end for area at 450,000 HA and production at 2.55 MMT (average yield of 5.6 MT/HA). However, further adjustments are likely both in harvested area and production depending on the final harvest results.
FAS/Sofia and Other Sources Estimates for MY2015/16 Grain Crops (as of October 29 2015)
MY2015/16 Major Crops Estimates
1,050 - planted
1,048 – harvested (MinAg tentative data)
4,678 (MinAg tentative data)
4.5-4.84 (range of industry estimates)
172 – planted
172 – harvested
180 – FAS estimate
705 (MinAg tentative data)
700-780 (industry estimates)
25 Spring barley (MinAg)
5.3 – planted and harvested
10.5 (MinAg tentative data)
21 (MinAg tentative data)
11.5 planted and harvested
34.6 (MinAg tentative data)
426 (MinAg tentative data)
320 harvested as of October 22
5.8 - 6.2
2,300 (MinAg estimate)
1,697 harvested as of October 22
Source: MinAg Bulletin#5 of October 29, 2015
In early fall, the MinAg published it final estimates for MY2014/15.
The final data confirmed that 2014 was an exceptionally good year for local grain production. Total grain area in MY2014/15 was 2% less than in MY2013/14 but the production was 4% higher due to very good yields, with some crops reaching record yields (wheat and corn).
MY2014/15 and MY2013/14 Grain and Feed Crops Areas and Production Final Official Data
MY2014/15 vs. MY2013/14
Source: Bulgarian Ministry of Agriculture and Foods
The current marketing year started with unusually high stocks of wheat, followed by a good harvest. Despite the full warehouses, farmers are still reluctant sellers due to unattractive prices and tough regional Black Sea competition. As of the end of October, wheat exports are approaching 1.6 MMT. Exports through the major Black Sea port of Varna were reported at 33% higher than a year earlier.
World Trade Atlas/WTA data shows exports at 3.02 MMT (wheat and wheat flour converted in wheat equivalent CWT) with main destinations in the EU (Spain, Romania, Greece, and Italy) and third countries such as Libya, Syria and South Korea. This is 19% lower than exports in the previous season. Sluggish exports, along with high 2014 crop, resulted in accumulation of higher ending stocks (estimated at 600-700,000 MT). Wheat exports accounted for 56% of the total crop in MY2014/15.
Wheat Trade, MY2014/15 and MY2015/16
Wheat and Wheat Flour
Wheat Converted CWT
Reported exports as of October 2015
46,648 WCT (EU)
2,800 CWT for the month of July 2015 (WTA)
532,830 WCT- Spain
427,235 WCT - Romania
416,668 WCT - Greece
232,701 WCT - Italy
416,807 WCT - Libya
255,955 WCT - Syria
115,208 WCT - South Korea
100,700 WCT - Tunisia
100,010 WCT - Ethiopia
49,775 WCT - Egypt
76,426 WCT - Turkey
339,000 MT reported exports in the month of July (WTA) to Spain, Korea, Greece, Italy, Romania, Portugal
774,000 MT reported exports for the period July 1- October 22 through the port of Varna (33% more than in the corresponding period a year ago), source: MinAg
1,550,000 MT reported total exports by industry sources for the period July 1- October 15
The current marketing year started with practically no endings stocks. Farmers enjoyed better than expected prices and sales were active. As of the end of October, barley exports are approaching 280,000 MT although exports through the Black Sea port of Varna were 50% less than a year ago. Traders opine that the barley export potential is almost exhausted and smaller quantities can be exported in the near future.
Exports at 550,000 MT with the main destinations as Libya and Saudi Arabia. This is above previous expectations (530,000 MT) and is 45% more than in the previous season. Barley exports accounted for 65% of total crop in MY2014/15.
Barley Trade, MY2014/15 and MY2015/16
Reported exports as of October 2015
1,063 MT (EU)
2,178 MT for the month of July 2015 (WTA)
59,421 MT - Romania
151,678 MT - Libya
128,150 MT - Saudi Arabia
43,756 MT - Iran
31,010 MT - Algeria
189,115 MT reported exports in the month of July (WTA) to Saudi Arabia
91,000 MT reported exports for the period July 1- October 22 through the port of Varna
(50% less than in the corresponding period a year ago), source MinAg
280,000 MT reported total exports by industry sources for the period July 1- October 15
Corn exports in the current year had a late start due to a delayed and still ongoing harvest. Per industry sources, exports are approaching 260,000 MT by the end of October. The MinAg reported 32% less corn exported through the major Black Sea port of Varna. Total exports are expected to be lower for the year at 1.7-1.8 MMT due to the shorter crop.
Total exports will reach slightly above 2.0 MMT. Main export destinations during the year were in the EU (Romania, Spain, Italy) and new markets such as China and New Zealand.
Favorable exports, along with stable and higher feed use, led to reduction in ending stocks.
Corn Trade, MY 2014/15 (October 2014 – July 2015) and MY2015/16 (October 2015)
(October 2014 – July 2015)
Reported exports as of October 2015
21,318 MT – Serbia
18,836 MT - Romania
No reported imports
474,705 MT - Romania
252,402 MT - Spain
154,733 MT - Italy
102,880 MT - Portugal
102,378 MT - Ireland
202,670 MT - Greece
278,271 MT - China
38,500 MT - New Zealand
185,500 MT reported exports for the period September 1- October 22 through the port of Varna
(32% less than in the corresponding period a year ago), source MinAg
252,000 MT reported total exports by industry sources for the period September - October 15 from the new crop
In September 2015 the MinAg made a decision to close its National Grain and Feed Agency. The labs for quality control were moved to the Food Safety Agency authority, and the property of the Indemnity Fund for Public Warehouses was liquidated. The functions of the agency were transferred to the MinAg and its regional offices.
Due to the closing of the National Grain and Feed Agency, new weekly MinAg reports were launched in September. The MinAg started to publish data about harvest and planting progress as well as some trade data about grain exports and prices. Although this information is based on daily collection of data and cannot be considered statistically proven before final estimates, it provides a good indication of harvest and planting progress over time.
The MinAg issued a new regulation about collecting data, reporting and monitoring of the grain market. Farmers, warehouses and traders will continue to report on stocks through a newly established electronic system. Any farmer who produces grains on more than 50 HA will be obliged to report production as well. The MinAg will monitor and control farmers' reports through on-spot inspections.
The MinAg State Fund Agriculture announced soft loans for farmers at U.S. $5.9 million. The funds can be used for purchases of fertilizers and wheat planting seeds at a rate of U.S. $47/HA for fertilizers and U.S. $23/HA for planting seeds. The interest on the loans is 4.5%.