Black Sea, East Europe to further expand wheat exports -analyst

21.04.2017

The Black Sea region and east European countries are in coming years likely to further expand their rapid growth of wheat exports, an analyst said on Thursday.

An estimated 40 percent of the world wheat export trade is currently held by Russia, Ukraine, Kazakhstan and countries along the Danube river after a surge in sales in recent years, said Vito Martielli, grains and oilseeds analyst at Dutch bank Rabobank.

"These countries will become even more important, they have even more scope to increase wheat production," he said in a presentation to the Global Millers' Symposium in Hamburg.

German farmers achieve wheat yields of about eight tonnes per hectare, he said. But Romania and the Danube region countries achieve only about four tonnes a hectare.

The Black Sea and Danube region has increased its cost competitiveness against rival suppliers in recent years, making full use of low freight costs and favourable exchange rates, he said.

This enables Russian wheat to be currently offered in South East Asian markets sometimes more cheaply than U.S. and Australian supplies despite shorter shipping distances.

Large investments are likely to continue to expand grain transport infrastructure along the Danube river, he said.

"We see a lot of potential for increasing wheat exports from the Danube region," he said. "The Danube could develop similar importance to the world grain trade as the Mississippi river."

Southeast Asia and sub-Saharan Africa are expected to be major growth markets for wheat exports in coming years, he said.

Increasing meat consumption in Asia will be a factor, he said. Indonesia, a largely Muslim country, will likely expand poultry production which will in turn raise demand for grains including feed wheat.

Meanwhile, wheat demand in sub-Saharan Africa is expected to increase in the coming five years. In the next decade, sub-Saharan countries could overtake North African states as Africa's main importing regions.

"The potential to expand production in countries such as Ethiopia and Zambia will not be as large as the increase in demand elsewhere in the sub-Saharan region," he said.


indiatimes

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