The European Union is likely to surpass the United States to become the top world wheat exporter next season as high freight rates help EU suppliers tighten their grip on nearby markets in the Middle East and expand sales in Asia.
A rise in freight costs has hurt U.S. sales to importers such as Egypt, the world's top wheat buyer, while its shipments to another buyer, Iran, have been affected by political tension.
"There is no such thing as a captive market in the international grains trade, and the U.S. has the handicap of higher ocean shipping costs to the big African and Middle Eastern buyers," a European grain trader said.
Political tensions with Iran have not helped.
"The long-term political friction between Iran and the U.S. meant Iran bought from the U.S. only when its back was against a wall. Germany, and so the EU export figure, benefited from this," one European trader said.
The U.S. Department of Agriculture has forecast that U.S. wheat exports in the 2014/15 season will total 25.2 million tonnes, the smallest volume in five years. It expects the European Union to ship 28 million tonnes, its second-highest volume after a record 30 million in 2013/14.
U.S. wheat exports have been in long-term decline since the early 1980s, when they peaked at more than 48 million tonnes, as wheat has lost favor with U.S. farmers in part because of biotech advances in corn and soy crops.
"We've seen a huge rise in exports by Romania in the past few years as several multi-national trading houses increase origination purchases there," one European trader said.
"They (Turkey) will be requiring imports for their milling and flour export industry," said Sarah Nightingale, an independent consultant and former trade policy manager for the Grain and Feed Trade Association (GAFTA).
"We (the U.S.) are losing market share. The EU sellers have this year become more aggressive, and we already have an aggressive posturing coming out of the Black Sea region," Shawn McCambridge, a senior grains analyst with Jefferies Bache, said.
"The Asian markets' buyers have been testing out some Black Sea supplies. It's similar to what we saw a couple of years ago in Egypt. We were traditionally the primary supplier, year in and year out. Now we are a minor supplier," he added.
South Korean feedmakers are among those increasingly looking towards EU and Black Sea suppliers.
"However, actual deals are made for worldwide origins, and suppliers usually decide at the last minute which origin to supply depending on prices at that time. The worldwide origins include East Europe, the United States, Canada and Australia."
The U.S. wheat industry appears resigned to losing its status as the world's top supplier in the future.
"We've always thought that one of these days we are going to walk into the office, and the U.S. is not going to be the largest world wheat supplier," said Vince Peterson, vice president of overseas operations at U.S. Wheat Associates.
"Other than saying that maybe ruins our morning coffee, does that really mean anything? As long as we have adequate access to the markets that value and are willing to pay for the wheat we produce, we are in pretty good shape."
"We do have our traditional customer base that tends to be loyal as long as the discount to other countries isn't too wide," Jefferies Bache analyst McCambridge said.
"We also have some markets (for which) we hold a geographical advantage, in particular South America and Central America. The problem is (that) beyond that circle, it becomes difficult to compete."