Low-Priced Russian Grain Depresses Bulgarian Wheat Exports
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Export demand for Bulgarian Wheat has been depressed due to the heavy and low-priced Black Sea supply (Russia). Farmers preferred to keep their stocks due to higher production costs, inflation, and expectations that prices would climb to their last season level again. With full warehouses and favorable spring weather leading to higher yields, farmers became concerned about logistical issues related to the upcoming harvest and accelerated sales and exports.
According to the AgFlow data, Bulgaria exported 2.8 million tons of Wheat in Jan-June 2023. In June, key markets were Indonesia (0.27 million tons), South Korea (0.1 million tons), Spain (85,500 tons), and the UAE (44,000 tons).
As of the end of May, Wheat exports were reported to be 36 percent lower than a year ago at 3.0 MMT, compared to 4.8 MMT in the corresponding period in MY2021/22. Exports were at almost 3.8 MMT at the end of June but still behind that a year ago. Total Wheat exports (in WGE/Wheat equivalent) in the three-quarters of MY2022/23 (July-March) were at 2.7 MMT to main destinations Algeria, Spain, Indonesia, Tunisia, and Greece. This is about 40 percent lower than exports in the corresponding period in MY2021/22 (4.43 MMT).
According to the EC Customs data, as of June 26, 2023, Bulgaria exported 2,859,868 MT of Wheat to non-EU markets, or 9.3 percent of total EU exports, ranking as the fifth-largest EU Wheat exporter after France, Romania, Poland, and Germany. Following record high ex-farm prices in May-June 2022, prices began to decline since then. The gap between the local ex-farm prices and the EU prices has gradually widened, especially since March. As of June, the ex-farm Wheat prices were about 60 percent of the price level a year ago.
Local food and feed consumption has been relatively stable, although feed use has slightly declined in MY2022/23. This was due to the challenging situation of the dairy, livestock, and poultry industries that have suffered from expensive feed and stagnant dairy/meat prices, resulting in negative margins in the first half of the MY. The situation has improved in the spring with lower feed Wheat (Grain) prices, softened food inflation, and gradually growing dairy/meat prices. As a result of stable domestic consumption and lower exports, the country accumulated record-high ending stocks.
As of the end of May, ending stocks were 88 percent higher than a year ago at 1.9 MMT. Post projection for MY2022/23 ending stocks is increased to about 1.0+ MMT or double the ending stocks of MY2021/22. This continues to raise concerns about logistical issues at harvest time and additional pressure on farm prices. Official data about Grain storage in Bulgaria is at 14.5 MMT in 3,600-Grain storage. Private estimates, however, are for a higher storage capacity of 18.0+ MMT due to considerable investments in recent years.
Barley Export in Bulgaria
Similar to Wheat, export demand for Bulgarian Wheat has been depressed. The reduction in Barley exports is more significant than Wheat, with 59 percent lower exports as of May 2023 over 2022. At the end of June, Barley exports reached 218,000 MT or 47 percent lower than a year ago (414,000 MT). According to TDM, Barley exports in the first three-quarters of MY2022/23 (July-March) were 115,823 MT to main destinations Spain, Israel, and Greece.
According to the EC Customs data, as of June 26, 2023, Bulgaria exported 80,000 MT of Barley to non-EU markets ranking the country as the fifth-largest EU exporter after France, Romania, Germany, and Denmark. Barley monthly prices have been more stable than Wheat prices and are still maintaining higher levels in MY2022/23 compared to MY2021/22.
Other sources: USDA
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