Developing Countries Will Lead Global Rice Import Growth in 2013-22, Says USDA Rice growers positive California MG prices are UP Russia MG Harvest coming to end Egypt open rice exports Vietnam’s rice export in tough competition with India Thai rice exports in May Rise Above Target This Year Viet-Nam Rice exports likely to fall this year
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Bumper E.U. wheat crop, short U.S. harvest to boost E.U. exports
Lloyd's List International, July 14, 2004
SHIPOWNERS can expect to see a shift in wheat exports this season, with US wheat harvests down by 12% on last year's crop.

However, with the worldwide production increased, analysts believe that this gap in supply will be easily filled.

"US wheat harvests have definitely suffered and will not be able to meet expectations this year," says an analyst with a London-based brokering firm.

"But the European Union is expecting a rebound in wheat exports and that should see the market through."

This will come as music to the ears of those shipbrokers who have read a report by the US Department of Agriculture, which predicts a 16% drop in wheat exports this year.

According to last month's report, 32m tonnes of wheat were exported in 2003-04, while for 2004-05 this figure had dropped by 19% to 26m tonnes.

"This drop in production will not directly lead to lower exports," explains an independent analyst. "Although the harvest is reduced this year, the US has stocks from previous years which can supplement this. The main reason for the expected decrease will be the inability by the US to compete with countries which have had extremely good harvests."

In his opinion, the main competition that the US faces is from the EU, which is harvesting what is said to be a record wheat crop. With the increase in member states, and thus more harvest area, this is expected to be the main source of wheat exports in the world market.

He also believes shipowners can expect increased exports from countries such as Australia and Argentina: "They both had a good crop at the beginning of the year which puts them in a good position to export. Canada should see a similar production to last year's 15.5m tonnes. There will probably also be a revival in exports from the Black Sea area, with Ukraine and Russia likely to see high harvests for the mid- 2004 crop and a central surplus available for export."

Most market players are counting on an increase in imports to China to soak up the excess supplies, believing that, despite its record harvest, China will continue to import large quantities of grain to rebuild its diminished grain stocks.

However, the analyst says: "It is true that China may increase its imports. However, with its large harvest this season, Europe will definitely reduce its imports, thus balancing out the market. Other countries in the Middle East and Asia that usually import large quantities of wheat are also likely to need less. What this basically means is that the US is competing with all these countries for a staple market with no real increase in consumption. This is what will lead to a decrease in US wheat exports."

Thus, far from a drop in shipping activity, shipowners can expect an increase in activity along other routes, which should see prices rising in the near future.
MGR Archive 15.7.2004
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