EU slashes wheat export hopes, as crop estimate grows ever smaller

31.08.2016

The European Commission slashed its forecast for EU wheat exports, as harvest ideas grow ever lower, meaning that the bloc is likely to lose to Russia its position as the world's top wheat exporter this season.

The European Commission forecast 2016-17 soft wheat exports outside the bloc at a four-year low of 25.0m tonnes, compared to the 29.0m tonnes forecast last month, and the 32.4m tonnes shipped last season.

Total wheat exports for 2016-17, including durum, were forecast at 26.27m tonnes.

Falling crop prospects

The decline in EU wheat exports reflects sharply reduced crop prospects.

The EU wheat was down sharply this year, due to unhelpful weather, in particular heavy and unwanted rain in France, the bloc's top grower.

The European Commission cut its forecast for total usable wheat production in the EU this season to 142.0m tonnes, down from 144.5m tonnes forecast last month - and well below the 160.1m tonnes achieved last year.

Soft wheat production was forecast at 133.3m tonnes.

The commission also trimmed its idea of the EU corn crop, by 300,000 tonnes to 65.5m tonnes, although that still represents a sharp recovery from the 58.0m tonnes reaped last year, when crops in many countries were affected by a late-season dryness.

Russia steps in

This sharp drop in wheat export prospects mean's that the EU looks set to lose its place as the top wheat exporter, being overtaken by Russia.

The US Department of Agriculture foresees Russian wheat exports in 2016-17 at 30.0m tonnes.

The combination of a bumper wheat crop, and the low rouble, is allowing Russia to rapidly increase exports, winning market share in new destinations.

Since the start of the season, Russia has even shipped wheat to Algeria and Morocco, traditionally the bailiwick of French exporters.

According to the Moscow based consultancy Ikar, consultancy, Russia will export 3.0-3.2m tonnes of wheat in August, after shipping 2.3-2.5m tonnes of wheat in July.

According to official government data, exports in the season to August 24 showed exports running 1% behind last year's pace, but the pace of the harvest has been slow so far this year, and supplies are likely to pick up.


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