Wheat heat production decrease in EU – chance for Black Sea suppliers


EU's wheat is currently one of the most discussed issues in global agricultural community. The entire agricultural world follows news from French fields, which have suffered from excessive rainfalls this year. Let’s try to understand the current situation, namely market expectations for wheat production in the EU, particularly in France and prospects for Black Sea wheat in the 2016/17 season.

French Agriculture Ministry estimates that in 2016 the country will harvest nearly 37 MMT of soft wheat, which is 10% less than last year. Besides, the share of high-protein wheat supply is also expected to decrease considerably. French wheat quality has been significantly affected this year. After a huge amount of rains and hail fields flooding was observed in France, which along with yields reductions entails an increased risk of grain infection by fungous diseases.

As regards Black Sea region, wheat production estimates increase both in Ukraine and Russia, as harvesting campaign proceeds. UkrAgroConsult believes that wheat production in Ukraine will reach at least 24 MMT in the 2016/17 season (+33% to initial estimates). Wheat harvest in Russia is likely to exceed 65 MMT, or even 66 MMT. If at the beginning of the year wheat production in Russia was expected to decline compared with 2015, then currently it is projected to increase at least by 5%.

By analogy with France, wheat quality will be probably lower than the last year. Nevertheless, amid total wheat harvest increase, milling wheat production in Russia and Ukraine is unlikely to be lower than in 2015. Moreover, starting wheat average yields in other Black Sea countries, such as Kazakhstan and Bulgaria, also exceed the last year's levels considerably.

Full version of the article is available to subscribers for weekly market report “Black Sea Grain & Oil” and “Online market review” by UkrAgroConsult.




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