Articles of Interest- Friday, August 9, 2019
August 9, 2019
EU Wheat Exporters Braced for Upheaval as Saudi Opens Market
Reuters – 08/08/2019
Saudi Arabia’s decision to adjust its wheat import requirements, opening the door to Black Sea grain, will cause major upheaval for some European Union exporters who may have to seek alternative markets, traders said. Saudi state grain buyer SAGO said on Thursday it would relax its bug-damage specifications for wheat imports from its next tender. Russia has sought access to Saudi Arabia’s wheat market for some time as part of Moscow’s bid to take market share from the EU and United States in wheat markets of the Middle East and North Africa. “Saudi Arabia, Algeria and Iraq are three major markets in which state purchasers have until now kept out Russian wheat,” one European trader said. “Russian wheat is traditionally so cheap and with the advantage of low ocean shipping costs … it dominates markets it is allowed into.” Traders expect Russian wheat to move into the Saudi Arabian market on a substantial scale, with existing suppliers in the EU potentially facing a loss of business. “Saudi Arabia is Germany’s biggest wheat import customer this season, so Germany will be among the biggest losers,” one German trader said.
Australia to Continue Buying Canadian Wheat in 2019-20
S&P Global – 08/09/2019
Australia, which made a rare purchase of Canadian wheat in the current marketing year, is expected to continue buying more wheat in the 2019-20 marketing year (October-September), as weather conditions remain difficult in key states, market analysts say. Australia’s wheat output dropped 45.6% to 17.3 million mt in the 2018-19 marketing year from a record high of 31.8 million mt in 2016-17, owing to prolonged drought conditions, data from the Australian Bureau of Agricultural and Resource Economics shows. This forced the country to import wheat for the first time in 12 years.
Australia will see more wheat imports this year and through next year, James Maxwell, manager at Australian Crop Forecasters, told S&P Global Platts. Queensland and northern New South Wales, where almost all of Australia’s high protein Australian Prime Hard wheat is produced, are facing as bad a season as last year, if not worse, and drought conditions remain, Maxwell said. “There will again be a shortage of the high quality wheat that is required for industrial purposes,” he said.
Proximity Australian Wheat’s Only Plus in Indonesia
Grain Central – 08/09/2019
AUSTRALIAN wheat is losing market share in Indonesia to cheaper origins, and its proximity to Indonesia is its only advantage in this evolving market. Frankie Welirang addresses the AGIC 2019 conference. That was the message from Association of Flour Producers in Indonesia (APTINDO) chairman and PT Indofood Sukses Makur Tbk (Bogasari Flour Mills) director Franciscus “Frankie” Welirang in his address to the Australian Grain Industry Conference (AGIC) in Melbourne last week. Indonesia has traditionally been Australia’s biggest wheat market, and Mr Welirang said its sales had fallen markedly in recent years as Argentina and Black Sea-origins increased their sales to Indonesia. “Australia is dropping,” he said. Mr Welirang said Australia had only one advantage in supplying Indonesia with wheat. “There is only one for Australia: close proximity to Indonesia. “There is only one week shipment time.” He said price was the advantage of Indonesia’s rising suppliers. “You cannot exclude price.” Mr Welirang said competitive pricing from new volume suppliers was challenging Indonesia’s longstanding view of Australian, Canadian and United States wheat as preferable, and wheat shipped from the Black Sea as a filler.
No End in Sight for U.S.- China Trade War, USMCA Ratification
World-Grain – 08/09/2019
Congressmen speaking at the International Sweetener Symposium Aug. 6 in Asheville, North Carolina, U.S., said they expect ratification of the United States-Mexico-Canada Agreement (USMCA) late in the year or early next year, while a trade deal with China may not happen until after the 2020 election cycle. “I think it (USMCA) will pass,” said Congressman David Rouzer of North Carolina. “It will take a little time.” House speaker Nancy Pelosi won’t bring it to the floor until it has majority support from her conference, he added. Meanwhile, Congressman Filemon Vela of Texas said he was confident the USMCA would not come to the floor of the House in September or October, but there was a “decent chance” it would could come up for a vote in late November or December. “Only time will tell,” he said. Rouzer was less optimistic about a trade deal with China. “I personally don’t think you are going to see any agreement with China until after the (2020) election,” he said, noting that another 14 months meant little to China, who was working on a 30 to 50 year plan of “world political, economic and military domination.”
Oklahoma Wheat Commission’s Collaboration with Wheat Marketing Center Yielding Exciting New Opportunities for Local Growers
Oklahoma Farm Report – 08/07/2019
The Wheat Marketing Center located in Portland, Ore. Is described by Executive Director of the Oklahoma Wheat Commission Mike Schulte as the crossroads of technical and international wheat trade for the global marketplace. In a recent interview with Radio Oklahoma Ag Network Farm Director Ron Hays, he explained why the OWC has chosen to invest in the Center, which it hires to test and conduct product development research on the different wheat varieties produced in Oklahoma…“Often times, if we have millers and bakers that are coming on trade delegations to Oklahoma through the US Wheat Associates or going other places in the United States, they are going to be looking at analytical results from the laboratory up there (at the Wheat Marketing Center) on end use qualities for wheat varieties coming out of specific regions they are looking for,” Schulte explains. “Moving forward, we feel like it’s really important to be looking at all aspects of the market and trying to find different ways for us to become more competitive in the global marketplace.”
Source: U.S. Wheat Associates