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IKAR in Mass Media

Black Sea wheat exports to fall in July-Aug as market eyes Egypt

05 июля 2013 года

MOSCOW/KIEV, July 5 (Reuters) - Top Black Sea wheat exporters are unlikely to swamp traditional clients in North Africa and Middle East in July and August despite better crop prospects and an early start to the harvest.

Russia and Ukraine are expected to cut combined grain exports by one fifth to around 6 million tonnes in July-August compared to the same months in 2012, market participants said.

Last year wheat importers were buying for fear the Russian government might restrict exports by imposing quotas, tariffs or even an outright ban after drought slashed crops.

High stocks also supported a swift start of last year's season, traders in Russia and Ukraine said. None of these factors will impact supplies this year as stocks are down and it seems that there are no plans to limit exports, they added.

"The current pace of exports is very slow - we have exported only 28,000 tonnes in the first two days of this month," Ukrainian Agriculture Minister Mykola Prysyazhnyuk said.

Ukraine's grain exports in July are likely to be about half the 1 million tonnes exported in June, he said.

Ukraine exported 1.4 million tonnes of grain, including 333,600 tonnes of wheat, in July 2012. In August 2012 it exported reached 1.7 million tonnes of grain, including 881,492 tonnes of wheat.

Serhiy Stoyanov, director of the Ukrainian Agrarian Confederation grain lobby, said he expected relatively low exports in July, while August shipments could jump to between 1.5 to 1.8 million tonnes of grain, mainly wheat.

As for Russia, its Grain Union expects exports to total 2.5 million tonnes in August, including 2 million tonnes of wheat, up from 1.5 million tonnes of grain in July.

Russia has already exported 27,000 tonnes of new-crop wheat in late June, Dmitry Rylko, head of the Institute for Agricultural Market Studies (IKAR), said. He expects July wheat exports to exceed slightly 1 million tonnes.

Export forecasts vary significantly as demand from major buyers is not clear, traders and analysts said. The political crisis in Egypt, the world's largest wheat importer, remains the main issue clouding the demand outlook.

Egypt's armed forces overthrew Islamist President Mohamed Mursi on Wednesday.

Ukraine and Romania won Egypt's General Authority for Supply Commodities (GASC) tender, when it bought 180,000 tonnes on Tuesday, and strong competition between origins will continue, one of Moscow-based traders said.

He expects Russia's July wheat exports to exceed 1.5 million tonnes. Russia, Ukraine, Romania and Kazakhstan competes with France, the United States and Canada for Egypt's big market.

QUALITY ISSUE

The quality of Russian and Ukrainian wheat is expected to be worse than last year, when drought cut yields overall but the share of higher-quality milling wheat rose.

This will support Romania, which has increased the quality of its wheat during the last two years, said Sebastien Devos of Koepta agricultural commodities brokerage house.

"If this harvest shows again some good milling specifications, Romanian milling wheat may become a regular supply source to the North African and Middle East traditional markets," Devos said.

Romania may export about 300,000 tonnes of wheat in July and 500,000 tonnes in August, according to Devos's preliminary estimate. Romania ships its wheat through the Black Sea port of Constanta along with Hungarian, Bulgarian and Serbian origins.

Source: Reuters  |  #grain   |  Comments: 0   Views: 70

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