Black Sea wheat exports seen up 5% in 2021/22

Wheat exports from Russia, Ukraine and Kazakhstan will rise in 2021/22, a Reuters poll showed, driven by high crops and stockpiles as well as increased global demand.

The group, which exports its wheat mainly via the Black Sea to customers in Africa and the Middle East, faces tougher competition. In its main peer the European Union prospects for this year’s crop are also good.

Wheat exports from the three countries are forecast to rise by 5% to 66 million tonnes in the season, which will start on July 1, the poll of 21 analysts, officials and traders showed.

The combined 2021 wheat crop will fall by 1% to 124 million tonnes, the median estimate showed. For related table, click here:

Russia will remain the world’s largest wheat exporter, supported by a large stockpile and a higher crop in its southern regions – the main wheat producing and exporting area. The crop quality is unclear so far.

Exports could depend on traders’ ability to adapt their forward sales to grain export taxes, which Moscow started changing each week from June to tackle food inflation.

“The floating export tax regime is the main challenge,” a trader said. “Still nobody knows how to put an export tax estimation into pricing and secure market share.”

A large crop means exports from Ukraine will be close to a record level. Its quality may decline following rains earlier this year and yield more feed wheat for animals, traders said, adding that it was something they would be able to manage.

“Demand from some countries is shifting partly from expensive maize to feed wheat, so it will be in demand too,” a trader said.

A high corn crop in Ukraine, the world’s fourth largest maize exporter, may cause temporary logistical challenges for wheat exports.

Exports from Kazakhstan, central Asia’s largest grain producer, which starts harvesting in September, will be supported by a strong crop and supply from nearby Siberia.

Increased demand from neighbouring drought-hit Central Asian countries and a tight outlook for global high-protein supplies are also expected to bolster demand for Kazakh wheat, which usually has a high protein content.
Source: Reuters (Reporting by Polina Devitt and Olga Popova in Moscow; Pavel Polityuk in Kyiv; Olzhas Auyezov in Almaty; Nigel Hunt in London; Michael Hogan in Hamburg; Gus Trompiz in Paris; editing by Barbara Lewis)

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