Milling & Baking News - August 11, 2009 - 7

Editorial



A new leader emerges in global wheat exporting

ardly any development defines the dynamic constituent countries strongly declare independence,
nature of the global wheat trade more dra- especially from Russia, its largest and most assertive
matically than realizing that the countries member. Except for the central role of Black Sea ports
comprising the Former Soviet Union rank as the in moving most of these exports, the F.S.U. nations
world's leading wheat exporter in 2008-09. Even have nothing in common in export marketing. The
though projections early in the year had pointed to move into the lead in 2008-09 reflected record shipthe likely F.S.U. dominance, this possibility seemed ments by Russia, at 16 million tonnes, and by Ukraine,
so contrary to historical experience that it was not 10 million. Achieving that record followed crop peaks
appreciated, particularly in grain-based foods. After in both countries, with the 2008 wheat harvest in Rusall, it was only a decade before that F.S.U. imports ex- sia up 29 per cent and Ukraine's nearly double 2007.
ceeded the takings of any other buyer to the point that Kazakhstan, which has been the world's leading exits demand was a powerful force in wheat and flour porter of wheat flour for several years, is the only
prices. To have that position transformed to the point country in the F.S.U. to experience reduced wheat exthat this same group of nations now plays the nearly ports due to a crop shortfall.
identical price-dominating role as the top exporter of
The F.S.U. lead in global wheat exports reflected
wheat is to describe an unprecnot just record production, but
Russia and the F.S.U.
edented turnabout.
also large amounts of low qualnow loom as a powerful
According to the Foreign Agriity grain to meet expanded global
presence in global
cultural Service of the U.S. Departfeed wheat demand. Very aggresexporting and also in
ment of Agriculture, the nations
sive pricing was pursued by exwheat prices.
of the F.S.U. moved 31.8 million
port merchants who allowed the
tonnes of wheat to foreign marlarge crop to drive down domeskets in 2008-09. That accounted for a quarter of global tic prices. Low freight costs to nearby markets in the
exports of 127 million tonnes. It was a new record in Middle East helped.
exports for the F.S.U., with the past season's outgo up
It is a mistake, as tempting as it may be in light
by slightly more than 50 per cent from the prior year's of many other issues, to believe that Russia's and
21.9 million. It is interesting that the F.S.U. record in the F.S.U.'s emergence as a force in wheat exporting
wheat imports was 21 million tonnes in 1991-92.
does not have the Kremlin's attention. With the reWhile the F.S.U. capturing the No. 1 position is cord of 2008-09 nearing its close, Russian President
certainly significant, sight must not be lost of the fact Dmitry Medvedev issued a directive to create a new
that, as a result, 2008-09 is the first year in modern government-controlled OAO United Grain Comhistory that the United States does not stand as the pany that would, within three years, account for at
wheat leader. America's exports of wheat in 2008-09 least half of the country's grain exports. Put into the
were 26.5 million tonnes, down 22 per cent from the new company are 31 grain storage and processing
peak of the prior year and accounting for a 21 per cent facilities. In addition, Mr. Medvedev has charged
share of the total. The latter share was four percentage the new company with expanding grain exports and
points behind the F.S.U. In 2007-08, the United States building the needed domestic infrastructure. Havaccounted for 30 per cent of trade, which was normal. ing achieved records in the past crop year without
In considering this race for wheat exporting lead- this sort of directive, Russia and the F.S.U. now loom
ership, it is important to recognize that the F.S.U. as a powerful presence in global exporting and also
is a "former" single nation and that its present-day in wheat prices. MBN
MORTON SOSLAND, EDITOR-IN-CHIEF
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