World wheat trade up slightly

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Projected world wheat trade for the 2013/14 (July-June) international trade year is up 0.5 million tons to 152.4 million. Driven by production changes and shifts in competitiveness, export projections for several countries are adjusted this month.

EU-27 export prospects are up 1.0 million tons to 23.0 million as supplies are ample, and the pace of licenses is the strongest in 10 years (4.5 million tons of soft wheat since July 1). Romania is aggressively exporting to Egypt and France is expected to take over the Egyptian business as Romanian supplies dwindle.

France is also currently exporting to China, Algeria, and Saudi Arabia. A sharp increase in wheat supplies for Canada this month—high-quality wheat in particular, which is expected to be in short supply this year—makes the country a strong competitor.

Canadian exports are projected up 0.5 million tons this month to 20.5 million, the highest (for the international trade year) in almost two decades. Partly offsetting are reductions in wheat export prospects for the United Arab Emirates (UAE), down 0.4 million tons to 0.3 million; in Paraguay, down 0.3 million tons to 0.7 million, and in Uzbekistan, down 0.3 million tons to 0.4 million.

The reduction in Paraguay reflects lower projected wheat supplies this month, while the changes in UAE and in Uzbekistan in the absence of new information match the confirmed 2012/13 final results. Wheat imports increased 0.5 million tons each this month for Egypt and Iran, and by 0.2 million tons for Brazil.

Egypt has been tendering aggressively since July, intending to replenish the countries’ wheat stocks to provide subsidized bread to about a quarter of its population who live below the poverty level. Several Arab countries (Saudi Arabia, UAE, and Kuwait) pledged monetary support for Egypt to aid the currency strapped country whose trade deficit is widening.

Iran has a smaller projected crop and the international sanctions generally are not applicable for food purchases, so Iran is expanding its outreach for grain imports, buying wheat originating in Russia and transported in small lots by barges from the Azov Sea/Don River and via the Volga River terminals into the Caspian Sea. Iran is also expected to import more wheat from Kazakhstan in the current season, given the projected Kazakh bumper harvest.

Imports in Brazil are projected up 0.2 million tons, reflecting expectations of a low quality crop, damaged by July and August frosts, and higher wheat feed use.

Partly offsetting are reductions in wheat imports for South Korea and Saudi Arabia, down 0.5 and 0.3 million, respectively. The reasons for the decline were discussed above while reviewing wheat feed use. Other smaller changes are offsetting. U.S. trade year imports are up 0.2 million tons to 3.7 million this month, on the expectation of larger durum and spring wheat imports of high quality from Canada.

U.S. 2013/14 forecast exports are unchanged this month. Exports have been very strong in the first months of the season. However, larger wheat supplies in major competitors are expected to put pressure on U.S. sales, which are projected at a more modest pace in the later part of the year.

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