Romania Wheat Trade Divergence: Ameropa, COFCO, Cargill, and Viterra
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This year’s Wheat production in Romania is expected to be 10 million tons, with more than 10% compared to the previous year. The forecasts for the year 2023 are good overall. In the commercial year July 1, 2022 – June 30, 2023, Romania exported 4,998,341 tons of common Wheat to third markets (outside the EU bloc). This quantity is in third place from the 2007/2008 commercial year.
Larger quantities were exported in the trading years 2021/2022: 6,738,084 tons and 2019/2020: 5,434,618 tons. However, the price of a ton of Wheat fell drastically throughout the 2022/2023 commercial year, from a peak of 400 euros/t in August 2022 to a low of 250 euros/t in June 2023.
The total value of Wheat exports was 1,573,020 euros, the second-highest amount since Romania’s accession to the European Union. (1,772,507 euros in 2021/2022). In the commercial year 2022/2023, Romania occupied the 2nd place in the export of common Wheat at the European level, with France in first place, with 9,948,297 tons. The total cereals exported by Romania in the 2022/2023 commercial year was 8,877,293 tons.
Romanian Wheat exports to third markets between July 1 and 30 totaled 588,756 tons, the most enormous quantity delivered by a European Union member country. The amount represents over a quarter of European exports to third markets, 2,346,741 tons. The second place is Bulgaria, with 538,878 tons, and in third place is Poland, with 479,984 tons, while Germany is in fourth place, with 333,588 tons, and in fifth place is France, with 294,585 tons.
As per AgFlow data, Romania exported 0.47 million tons of Wheat to Spain in August – Sep 2023. The following markets were Vietnam (0.25 million tons), South Korea (0.23 million tons), Saudi Arabia (0.17 million tons), Jordan (0.12 million tons), and Thailand (0.1 million tons). Total exports hit 8.6 million tons in Jan – Sep 2023.
Romania also ranks first in barley exports, on third markets: 179,762 tons between July 1 and July 30, 2023. However, a significant decrease is observed compared with the same month last year.
This year’s production and prices do not satisfy agricultural producers. Farmers who sell directly from the field and choose not to store also receive 75 coin per kilogram, a price of 750 leu per ton of Wheat (USD 160/t), in the entire harvest season. USD 1 equals 4.71 Romanian Leu. Farmers who sell directly from the field receive prices at a maximum of 1 leu. Agricultural producers have revealed what the Wheat prices are for the 2023 harvest. Here are the offers that agricultural producers in several areas of the country have received for Wheat:
– Wheat price at harvest in Satu Mare: 750 leu per ton;
– Wheat price at harvest in Bihor: 750 leu per ton;
– Wheat price at harvest in Teleorman: 780 leu per ton;
– Wheat price at harvest in Galati: 820 leu per ton;
– Wheat price at harvest in Dolj: 820 leu per ton;
– Wheat price at harvest in Gorj: 900 leu per ton;
– Wheat price at harvest in Tulcea: 930 leu per ton;
– Wheat price at harvest in Mehedinți: 1,000 leu per ton.
Romania quoted Japan the highest CFR price, USD 297 on average, in Jan – Sep 2023. The country also offered higher CFR prices for Far Eastern countries (South Korea: USD 296, China: USD 293, and Taiwan: USD 291). Spain’s was the lowest with USD 264.
For selected countries, trends of CFR price showed precisely a similar situation for South Korea, Kenya, and Egypt in Jan – Sep 2023. The price started falling since the last January. The lowest point was in June, and after that, it increased gradually.
According to ZF calculations based on public data, Viterra Romania, formerly Glencore, ended 2022 with a turnover of 4.87 billion leu, up 40% compared to the previous year. With this result, it climbed to the fourth position in the top of the largest Grain traders, surpassing ADM Romania Trading.
In the Grain trade, the market leader is Ameropa Grains, owned by shareholders from Switzerland, which made 8.5 billion leu in 2022. The following positions are COFCO and Cargill. Canadians from Viterra recorded higher revenues than Americans from ADM Romania Trading (4.15 billion leu in 2022), based in Chicago, for the second time in the history of the two companies in Romania. This situation also happened in 2020, a year with an acute drought, which led to a decrease in Grain production by 40% to 19 million tons.
Moreover, in 2022, Viterra Romania also had the highest profit in the company’s almost 30-year history at the local level. The net profit was 69.3 million lei, compared to a loss of 5.3 million lei in 2021.
Constanta Port is the main gateway for agricultural transportation; the storage capacity in this port is expanding continuously. As a net Grain exporter, Romania relies heavily on its transportation infrastructure to ship Grain to the Black Sea. The port of Constanta is the main trading hub for agricultural commodities from Romania and neighboring Bulgaria, Hungary, and Serbia.
There are two terminals for cereals − Constanța North and Constanța South − with a total annual traffic capacity of 5 million tons. Larger stocks will exert pressure on Romania’s storage and transportation infrastructure. Grain may be shipped by road, river, and rail. Agricultural barge traffic on the Danube River to the port of Constanta has increased, but overland truck transportation remains the primary means of delivering most commodities to the port.
The port of Constanta in Romania has flourished in recent years. However, infrastructural bottlenecks on roads, rail, and waterways persist. Romanian Grain production shows good growth potential, but transportation and infrastructure issues threaten its agricultural competitiveness.
Ukraine shipped 9.2 million metric tons of Grains through Constanta’s Romanian Black Sea port in the first eight months of the year and 8.6 million tons overall in 2022. Constanta is Ukraine’s main export route after Russia abandoned a deal that lifted a de facto Russian blockade of Ukraine’s Black Sea ports in mid-July.
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