Constanta: New Romanian Wheat Crop to Push Ukrainian Products
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With a world harvest forecast of 789 million tons in the year 2023/2024, according to the USDA report, Wheat is the main cereal crop in the EU. Cultivated throughout the world, being considered one of the most widespread foods on the planet; in 2022, Wheat was cultivated in Romania on an area of 2.15 million hectares, according to the INS. Although the world Wheat harvest in 2023 is considered the second largest in history, in Romania, the total Wheat production in 2022 was 8.559 million tons, according to the INS.
Romania has the silver on the European podium of Wheat importers and exporters (statistical data without the “durum Wheat” variety) in the 2022-2023 season, importing 0.89 million tons and exporting 3.96 million tons. The influence of the conflict in Ukraine is vital in the dynamics of agricultural trade. Total Wheat imports were 3.4 times higher in the EU compared to the 2021-2022 season, notes Claudiu Cazacu, strategy consultant at XTB Romania.
According to AgFlow data, Romania exported 3.4 million tons of Wheat in Jan-May 2023. In May, Sri Lanka led its export market with 0.15 million tons, followed by Spain (0.14 million tons), Algeria (0.12 million tons), and Bangladesh (0.11 million tons).
In terms of corn, Romania was in first place among exporters, with 1.64 million tons, but it also imported 1.34 million tons. In a region shaken by transformations, Romania’s importance as a production center and logistics hub is growing. The trend is also illustrated by the study of the possibility by the operator of the leading agricultural exchange in Europe to offer grain futures the option of physical delivery from Romania.
Grain and vegetable oil prices have adjusted from the peak reached last spring. The aggressive push that doubled Wheat prices in May 2022 from 2021 has given way to gradual declines supported by ample global production. A good season in Australia and high prices that boosted production, along with the Black Sea grain export deal, allowed the market as a whole to rebalance.
Many other regions, however, experienced disruption. The La Niña climate phenomenon affected the US, Canada, and Europe’s production. The US even imported Wheat, the drought making it more expensive to ship by rail than the cheaper seaborne Wheat from Europe to the East Coast. Quantities are currently limited, but the trend is likely to continue.
For Romania, farmers face less favorable conditions after competition from cheaper grains from Ukraine reduced their profitability when international prices were still higher than today. The influence of transport from Ukraine, partly felt at the local level, has generated discontent among local farmers. The European agreement to pay some compensation offered temporary relief.
Wheat Export Outlook in Romania
A rebound in Romania’s grain output this year may limit room for Ukrainian shipments through the Black Sea port of Constanta, a major transit hub for Kiev, particularly since the Russian invasion, port operator Comvex said. Constanta has handled nearly a third of Ukrainian grain exports since the Russian invasion, Comvex said, shipping 8.6 million tons in 2022 and 3.3 million in the first quarter of this year.
“New Romanian crops look set to be bigger than last year, which means there might be less room for Ukrainians,” Comvex manager Viorel Panait noted. “Operators will not prejudice their traditional clients.” Constanta Port handled 24.01 million tons of grain exports overall last year.
Romania, one of the EU’s biggest grain producers, is expected to harvest 10.35 million tons of Wheat this year in a sharp rebound from last year. Shipping through Constanta was cheaper than through Ukraine’s ports under the safe passage deal because long inspection queues in Istanbul added to costs.
Other sources: UMBRELA STRATEGICA
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