Bulgaria Unveils Grain Export Terminals at the Cost of Million Euros
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The export of Wheat from Bulgaria in the new season maintains its striking pace and reaches 2.77 Mt by the middle of October. The quantities delivered since the beginning of the season are 130% higher compared to the same period of the previous season. It should be noted that the start of the last season was extremely weak because of the war and the reluctance of Bulgarian farmers to sell in anticipation of better prices. Last year, bread Wheat prices at DAP port varied between BGN 620-660 per ton ($1 equals 1.85 Bulgarian Lev); this year, the amount is between BGN 405-430/ton.
Exports are also performing well compared to the average for the last five years, although the difference drops to 35% in favor of this season – 2Mt against 2.77Mt. Over 1.8 Mt of the exports were sent to third countries, while the remaining 0.9 Mt remained in the EU.
As per AgFlow data, Bulgaria exported 0.37 million tons of Wheat to Spain in Aug – Sep 2023. The following markets were Indonesia (0.21 million tons), Thailand (0.14 million tons), Tunisia (87,500 tons), South Korea (68,000 tons), Pakistan (50,000 tons), Algeria (45,000 tons), and Portugal (33,000 tons). Total exports hit 4.6 million tons in Jan – Sep 2023. Of which, 1.4 million tons were classified as Feed Wheat. The average volume of shipments was 57,500 tons. In 2021, Bulgaria exported Wheat worth $1.49 billion, making it the 11th largest exporter of Wheat in the world. In the same year, Wheat was Bulgaria’s 2nd most exported product.
Wheat Price Trends
At the Sofia Stock Exchange AD, trading in the “Grain” sub-category led the transactions in early October. The sales quotations for bread Wheat were from BGN 479.00 to BGN 532.00/ton; the buyers responded with BGN 300.00/ton, delivery DAP. Feed Wheat is offered at BGN 410.00/ton, and corn at BGN 420.00/ton. Oilseed sunflower from the field is sold from BGN 680.00 to BGN 770.00/ton; the demand was BGN 680.00/ton, at which price the transactions were concluded. All prices are without VAT.
Bulgaria quoted South Korea the highest CFR price, $303 on average, in Jan – Sep 2023. The country also offered higher CFR prices for Far Eastern importers (China: $302 and Taiwan: $300). Interestingly, Bulgaria offered Turkey and Vietnam the same CFR price of $281 despite their distance.
For selected countries, trends of CFR price showed precisely a similar situation for Egypt, South Korea, and Taiwan in Jan – Sep 2023. The price started falling since the last January. It dropped in June, rose in July, and then showed a stagnant trend.
Wheat is an exchange-traded commodity and the price at which it is exported, imported, and sold in Bulgaria and any other country is based on quotations on international markets. For Grain, there are usually auctions for quantities from major traders and countries, but quotes tend to hover around exchange rates anyway. However, according to Bloomberg, Russia sold Wheat in a contract with Egypt at a price below that in public auctions.
An essential factor is precisely the behavior of Russia. After some time of the war, the quotes began to fall sharply, and today, they are at their lowest levels in three years. This is also the joke that the markets played with many traders – they expected that the price would continue to rise and held back quantities to make a higher profit. However, their expectations turned out to be wrong, as happened with the Bulgarian producers.
A New Grain Terminals
The European Investment Bank (EIB) signed an agreement with Logistic Centre Varna EAD, part of Buildcom Group, for a €50 million loan to co-finance a new Grain terminal at the Black Sea port of Varna. The InvestEU program backs the EIB financing. The project will support food safety, promote less carbon-intensive maritime transport, and boost economic growth in the region by providing improved access to the export market for local agricultural producers.
Through the EIB support, Buildcom Group, Bulgaria’s largest privately-held sunflower oil producer and leading Grain trader, will integrate the logistics side of its business and optimize Grain and bulk port operations in the Varna area. The new Grain terminal is expected to be operational in the second quarter of 2026. It consists of a new quay, a silo, other storage facilities, and a new railway and road access.
In the last two market years, the port of Varna accounted for an average of 22% of the total export of Wheat and Barley from the country, 33% of the export of corn, and 4% of sunflower. In the first month of the 2023/24 market year, a total of 254.1 thousand tons of Wheat were exported from there, representing a five-fold increase annually.
A few days ago, Bulgaria’s state-owned Port of Varna said it has opened a new Grain terminal that will ensure full use of the warehouse and port infrastructure capacity to allow the processing of over 2 million tons of Grain per year through the Varna-West terminal alone.
The new Grain terminal is part of a €25 million ($26.3 million) investment project between the Port of Varna and Grain Terminal Varna West. Grain Terminal Varna West is a subsidiary of a local privately-owned fertilizer producer and Grain trader, Agropolychim.
The port operator said the new equipment will be delivered and put into operation within 12 months, allowing the 24-hour ship-loading capacity to be doubled to over 20,000 t of Grain. Currently, the processing equipment enables load rates of 450 t per hour or a little over 10,000 t per day.
The terminal’s expanded capabilities will allow the simultaneous handling of several Grain vessels to ensure a total export capacity of over 35,000 t per day. The Grain storage capacity, developed to date, amounts to 100,000 t. Port of Varna operates two terminals. Varna East, which is close to the city, has 14 berths, while Varna West has 22 berths and is located some 30 km west of the town.
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