The European Commission cut its forecast for European Union soft wheat exports this season, amid unexpected resilience in Russian shipments, but stood by expectations for bumper volumes in 2022-23.
The commission cut by 1.0m tonnes to 32.0m tonnes its forecast for the bloc’s soft wheat exports in 2021-22, as ends in June, following a marked slide in shipments in recent weeks.
The volume of EU soft wheat exports in the week to last Sunday, at 213,682 tonnes, were the lowest in nine months, and more than one-third below those of the same week last season.
Indeed, after a strong start to the season – which saw exports running more than 70% above year-ago levels over the first quarter – the pace has slackened such that the 21.61m tonnes exported for 2021-22 as of Sunday was 3.6% behind the year-ago level.
‘Not the best-placed origin’
The downgrade comes two weeks after France, the EU’s top wheat exporting country, cut its forecast for its own soft wheat shipments in 2021-22, by 200,000 tonnes to 9.5m tonnes, citing uncompetitive prices.
“With shipping costs, we are not necessarily the best-placed origin on price at the moment,” Marc Zribi, head of FranceAgriMer’s grain unit, said.
The revision also reflects the extent of Russian exports, which have beaten forecasts of many commentators, who expected that the sanctions and logistical hiccups prompted by the Ukraine war would represent severe hurdles to trade.
In fact, Russia exported 590,000 tonnes of grains last week, and 630,000 tonnes the previous week, according to SovEcon, which forecasts the country’s total wheat shipments for 2021-22 at 33.9m tonnes.
Analysis group Strategie Grains two weeks ago cut its estimate of EU soft wheat exports this season by 1.1m tonnes to 31.4m tonnes, citing that it had anticipated a bigger shift in demand from Ukrainian and Russian supplies towards EU origin.
Nonetheless, the European Commission stood by expectations of a sharp increase in EU soft wheat exports next season, to 40.0m tonnes.
The commission – which has cited “worldwide demand on lower supply from Ukraine” for its upbeat expectations for EU shipments in 2022-23 – trimmed its forecast for EU soft wheat production this year, by 1.19m tonnes to 130.1m tonnes, on a reduced area figure.
However, the extent of exportable supplies available for 2022-23 was supported by a higher figure for carry-in stocks, in turn a reflection of the reduced export expectations for this season.
The commission is nonetheless significantly more upbeat over 2022-23 soft wheat export prospects that Strategie Grains, which foresees them at 30.3m tonnes, based on a harvest estimate of 126.7m tonnes.