World Grain - January 2018 - 35

ments from Black Sea countries," said Liza Malyshko, a
UkrAgroConsult grain market expert. "Despite the jump of
freight tariffs, grain exports remained at a high level for all
destinations. Ukraine and Russia exported a combined 40.3
million tonnes of grain from July-November 2017 against
35.9 million tonnes at the same time last marketing year."
Further illustrating the point, Malyshko said freight
rates for Black Sea grains shipped to Egypt had been
gradually growing over the last two years and had not
negatively affected volumes. However, she warned
higher freight rates could become a factor in more distant
markets, particularly if shipping costs increased further.
"We have not found any direct dependence of grain
supplies on freight cost changes, but the further growth of
freight rates may produce an adverse effect on the competitiveness of Black Sea grains in distant end markets,
in particular in South and Southeast Asia," she added. "In
turn, such developments, along with the region's steadily
higher export potential, will boost competition between
Black Sea countries for nearby end markets such as
Europe and North Africa."

kets such as Nigeria, Kenya, Congo, Uganda, Tanzania,
Mozambique and South Africa.
However, Sych said this season's breakthrough market
was Indonesia. Ukraine exported some 1.5 million tonnes
of wheat to Southeast Asia's largest economy from JulyNovember 2017-18, up from 1.61 million tonnes for the
whole of the 2016-17 season.
"Russia also doubled wheat supplies to Indonesia in
the period under review," she explained. "So regardless
of freight rate behavior, Black Sea grain remains competitive in the Asian market along with offers from Australia,
Canada or the U.S."

LOOKING AHEAD
Rahul Sharan, lead research analyst at Drewry, said that
during 2018 Australian wheat exports might dwindle due
to lower production.
"Initially drier weather and now heavy rains have hit
wheat cultivation," he told World Grain in December.
"The meteorological department expects further heavy
rains in Eastern and Southern regions of the country.
"Nonetheless, we still believe grain trades will continue
BLACK SEA OUTREACH
to be steady in the coming months, where Russia and the
Black Sea producers have certainly made impressive in- U.S. will be the key suppliers.
roads into new markets in the last 12 months irrespective
"Strong harvests in Ukraine and Russia are also faRIVKLSSLQJUDWHÀXFWXDWLRQV0DULQD6\FKJUDLQPDUNHW cilitating robust exports. Sentiment is also improving
analyst at UkrAgroConsult, said Egypt had become a for European wheat exports. Even though production in
leading buyer this season.
France has improved compared to the last year, exports
³,QWKH¿UVW¿YHPRQWKVRIWKHFXUUHQWVHDVRQ8NUDLQH are unable to keep up the pace. Euro appreciation and insupplied 15% more wheat to Egypt - 1.1 million tonnes tense competition from Russian and Australian wheat are
- than at the same time a year ago," she said. "Russia hampering European exports, especially in the Far East
stepped up exports by more than 30% to almost 3.2 mil- region. Lower availability of Australian wheat next year
lion tonnes."
will provide a sigh of relief to the European traders."
Various other African destinations have also proven
Sharan also said that, apart from lower production this
attractive markets for Black Sea grains, with exporters season, Australian exports would be affected by an inEHQH¿WWLQJ IURP JRRG ORJLVWLFV FRQQHFWLRQV LQWR PDU- crease in import duty in India.
Dry bulk rate indices
4,000
BPI
BCI
BDI

3,500
3,000
2,500
2,000
1,000
500
0

Nov 2017

Oct 2017

Sep 2017

Aug 2017

Jul 2017

Jun 2017

May 2017

Apr 2017

Mar 2017

Feb 2017

Jan 2017

Dec 2016

Nov 2016

Oct 2016

Sep 2016

Aug 2016

Jul 2016

Jun 2016

May 2016

Apr 2016

Mar 2016

Feb 2016

Jan 2016

Dec 2015

Nov 2015

www.World-Grain.com / World Grain / January 2018

Source: The Baltic Exchange

1,500

http://www.World-Grain.com

World Grain - January 2018

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