- Shipments may decline by 23% this season from a year earlier
- Egypt, Thailand, South Korea are some of biggest customers
Ukraine’s wheat exports this season will probably drop almost a quarter from a year earlier, benefiting other major international competitors from the Black Sea region.
Shipments will slump 23 percent to 13 million metric tons in the season that started this month, according to the average of three analyst estimates in a Bloomberg survey. The figure was a record 16.9 million tons last season, researcher UkrAgroConsult says.
Ukraine was hit by dry weather last autumn, when farmers sowed wheat for this year, leading to cuts in the area planted. Though a warm winter and abundant rainfall in spring has improved the outlook, the nation’s projected harvest at 24.2 million tons will still be about 9 percent below last year’s record level, according to UkrAgroConsult.
Falling exports will benefit European countries like Romania on the Black Sea, as well as Russia, Laure Guinet, an analyst at trader ED&F Man Holdings Ltd., said by e-mail. “Availability will be high so Ukraine exports should be easily substituted.”
Russia will probably increase its outbound shipments 10 percent this season as its crop is estimated to rise to an all-time high.
Ukraine’s biggest wheat customers last season were Egypt and Thailand, Liza Malyshko, a UkrAgroConsult analyst, said by phone. Ukraine met a quarter of demand for wheat from South Korea, mainly for feed, in the year ended in June, the research company said.
Thailand is expected to cut foreign purchases this season, Malyshko said. It had shortages of local feed-grade corn and rice for swine and poultry farmers in the previous period, leading to bigger imports of replacement crops, according to the U.S. Department of Agriculture. Thailand’s output is expected to rebound this season, USDA figures show.
Ukraine is a major exporter of both feed and milling wheat, according to Rabobank International in London. “With high availability of feed wheat in the EU, our expectations are for greater demand for Ukrainian milling wheat this season,” Charles Clack, an analyst at the bank, said by e-mail.
Even if Ukraine’s wheat exports drop, they will probably still rank as its second largest, according to data compiled by UkrAgroConsult.
Following are estimates for Ukrainian wheat exports:
- UkrAgroConsult: 14 million tons
- ProAgro: 11.6 million to 11.8 million tons
- ED&F Man: 13.5 million tons