News
11.11.2009
Black Sea states tighten grip on wheat trade
Washington emphasised the Black Sea states' strengthening grip over the world's wheat trading as it cut hopes for exports from Canada, Europe and America.
The US Department of Agriculture lifted by 2.5m tonnes, to 34.9m tonnes, its forecast for exports from the Black Sea nations - Kazakhstan, Russia and Ukraine - in the year to the end of June.
While some of the increase reflected higher hopes for world trade, most came at the expense of big-hitting Western exporters.
"Abundant supplies of low-priced Black Sea wheat are expected to limit export opportunities for the traditional exporting countries," the USDA said.
Hopes for Canada's exports were cut by 500,000 tonnes, and Europe's by 1.0m tonnes.
The USDA cut its expectations for America's exports by 680,000 tonnes, noting the "slow pace of export sales and shipments and increased competition from major Black Sea exporters".
Chicago wheat for December stood 3 cents lower at $5.17 a bushel in lunchtime trade.
Global ambitions
The forecast leaves exports from the former Soviet Union – of which the Black Sea states account for all but a handful – on target to account for nearly 28% of world wheat trade compared with 6.3% a decade ago.
The region has been blessed with two years of good-to-excellent harvests, with Ukraine signalling on Friday that it may raise its grain production forecast yet again, to 47m tonnes.
Kazakhstan this week lifted its forecast for grain exports.
Furthermore, the countries have expressed a political willingness to keep ramping up production, a move, in Russia's case, viewed as boosting its ambitions as a global force.
However, many observers both within and outside the former Soviet bloc have expressed doubts over whether the countries have the infrastructure, financial firepower and legal framework to foster further expansion.
