Milling & Baking News - July 17, 2007 - 7

Editorial

New twists and turns in export flour markets

uch is to be learned from more than a cur- the size of Texas with a history of spring wheat producsory look at the export flour market, even by tion that this year will ship 1,750,000 tonnes of flour in
American millers who appear to have fallen wheat equivalent (nearly six times the U.S. outgo). Since
way behind both their old competitors like the Euro- its separation from the Former Soviet Union in the midpean Union and a raft of new export sellers whose par- 1990s, Kazakhstan has been expanding its agricultural
ticipation is for the most part surprising. There's even processing, and obviously its flour milling. This is a
a lesson in the American experience, where shipments country blessed by huge oil and mineral resources that
have plummeted because of food aid policies pursued give it an astounding 8.5 per cent growth rate in domesby the Bush administration and where commercial busi- tic product. Its booming energy sector is emphasized by
ness has become focused on Canada and Mexico. While newly-built pipelines, one delivering crude oil to China
U.S. millers have not given up on reinvigorating foreign and another heading to Russia and central Europe.
marketing, industry attention centers in politics. The
While Kazakh flour moves to many countries, its prihope is to persuade Washington that food aid donations mary sales, according to the I.G.C., have been to neighbors
of U.S. flour make more sense than
in the Commonwealth of IndepenIt is the emergence of
providing cash to needy nations.
dent States. Prime are Uzbekistan
Kazakhstan as the second
The shrinkage of U.S. flour
and Tajikistan, which in 2006-07
exports is best described by the
are forecast to import 600,000 and
largest flour exporting
outgo accounting for less than 3
500,000 tonnes, respectively. Unlike
country that merits the
per cent of the world total, conTurkey, which rose to the world's
greatest attention.
trasting with three or four decades
largest flour exporter in 2005-06 on
ago when U.S. flour represented more than half. That the back of shipments to Iraq, Kazakhstan has diversified
collapse has happened in face of recent expansion in its markets in ways that indicate aggressive, yet carefully
export flour trade, highlighted by revised data from conceived marketing. As the result of the drop in Iraq flour
the International Grains Council boosting the pace of imports in 2006-07, to only a little more than half of the
shipments by 10 per cent and indicating that totals are year before, Turkey has seen its flour exports fall sharply.
not far below the records achieved in the 1990s.
The revised I.G.C. data on global flour trade also asWithout delving into the many reasons for the demise sign a much more important role to Pakistan than that
of U.S. flour exporting, the real surprise has to be the new- nation had previously. Like Turkey, with its principal
comer countries to exports. When it recently revealed that business in Iraq, Pakistan's mills largely have relied
trade had been underestimated in recent years, the I.G.C. on a single strife-torn market, Afghanistan.
cited data for three countries as primarily responsible for
The boosts to flour trade that come from geographic
adding 1 million tonnes and bringing the total above 10 proximity and from the internal and external conflicts
million tonnes in wheat equivalent. Two of these three that are besieging Iraq and Afghanistan add a dimension
- Kazakhstan and Pakistan- have not prior to this been to flour export business that is relatively new. The same
considered significant flour exporters. The third correc- might be said of the way the new exporting nations and
tion, Argentina, adding 200,000 tonnes has enjoyed a their major customers share a Muslim religion commonalsurge in business with neighboring nations and also has ity. Yet, many countries in Africa that need huge quantidone eye-catching business with Nigeria.
ties of flour to relieve domestic hunger are without the asIt is the emergence of Kazakhstan as the second larg- sistance that American millers have provided in the past
est flour exporting country that merits the greatest atten- and stand ready to do so now, if their government would
tion. Here is a landlocked central Asian nation four times only recognize this need and how best to respond. MBN
MORTON SOSLAND, EDITOR-IN-CHIEF
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Milling & Baking News - July 17, 2007

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