Competition for wheat markets moving to Asia

25.04.2018

In the 2017/2018 season, Russia is going to supply 10 times more wheat to the Philippines, 3-4 times more – to Indonesia and Korea, and almost 2 times more – to India. Ukraine will be able to increase wheat exports to only two of these countries – by 45% to the Philippines, and 11% - to Indonesia (compared to last season), increasing the total volumes in the current season to 1002 KMT and 1793 KMT, respectively. Indonesia will become the main consumer of Ukrainian wheat in the region.

Such estimates were presented by the grain market expert of "UkrAgroConsult" agency Elizaveta Malyshko in her report at the XV Anniversary International Conference “Black Sea Grain: Moving Up the Value Chain”  - premiere event of the Black Sea region, recognized by global leaders of grain & oilseed industry.

In the corn market, the competition between individual countries is developing into competition between regions – the Black Sea region is increasingly opposed by South America. When in the 2016/17 season, Ukraine accounted for 71% of corn supplies to the European Union, then in 2017/18 MY, this share declined to 43% (September-January period was estimated). The European market was conquered by Brazil – its share in supplies increased from 8% to 53% over the year, said Elizaveta Malyshko.

The Black Sea countries will be able to increase grain exports to 116 MMT this season. However, in the 2018/19 season, the exports are likely to decline to 111 MMT, according to UkrAgroConsult estimates. It will happen mainly due to the reduction of Russian supplies to foreign markets. According to estimates, Ukraine will be able to increase exports by 1 MMT, and total grain shipments will reach 42 MMT.

In general, the uncertainty and volatility of the grain market is growing. This means that new earning opportunities may appear, says Elizaveta Malyshko. The expert suggests considering the results of a research of cereals profitability for 2018. According to UkrAgroConsult estimates, rapeseed is going to be the most profitable – about USD 240/ha. Barley takes the second place – about USD 170/ha.

XV Anniversary International Conference “Black Sea Grain: Moving Up the Value Chain”  took place on April 18-19, 2018 in InterContinental hotel, Kiev, Ukraine. Organizer – consulting agency UkrAgroConsult, General Sponsor – ACTAVA TRADING, Exclusive Financial Sponsor – Credit Agricole Bank, Exclusive Exchange Sponsor – CME Group, Official Sponsor – Sierentz Global Merchants. Sponsors -  Filhet-Allard Maritime, INTL FCStone, Intertek, Taban Grain, Tradomatic, Rietumu Bank. Supported by GAFTA and Ukrainian Grain Association.

The conference was attended by 700 delegates from 400+ companies and 50 countries. Participants are represented by international producers and crushers of grains and oilseeds, agri holdings, traders, banks and investment funds, shipping, brokerage, insurance, surveying, law and consulting companies etc.

 

UkrAgroConsult

 

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