World wheat trade up, U.S. exports down
World wheat trade for the international July-June 2012/13 trade year is projected up 1.6 million tons to 141.8 million this month, driven by stronger demand for imported wheat in Iran and a number of other countries throughout the world.
The Iranian Government is continuing to build up its reserve wheat stocks in the midst of an intricate political situation. The wheat import projection for Iran is raised this month by 1.0 million tons to 4.0 million, reflecting the strong pace of deliveries from the EU-27 –Lithuania– and Australia.
The dynamics of relative prices for wheat and corn accelerated wheat (while cutting corn) imports in Korea, up 0.5 million tons to 5.5 million. Algeria and Yemen have been recently purchasing wheat at a faster pace than expected earlier, especially from the EU-27 (France), and their 2012/13 imports are projected up 0.3 million tons this month each, to 5.5 and 2.9 million, respectively.
Japanese, Chinese, and Chilean wheat imports are up 0.2 million tons each due to the pace of pur chases, and are expected to reach 6.1, 3.2, and 1.0 million tons, respectively. Jap an has recently made unusual purchases of SRW wheat from the U.S. that is likely to be used for feeding.
There are small increases this month in projected imports by Canada, Ecuador, Tanzania, and Togo. Import prospects for 2012/13 are reduced this month for Egypt and Kenya.
The projection for Egyptian imports is reduced by 1.0 million tons this month to 8.5 million. For a number of reasons the country has trouble in securing sufficient wheat import supplies.
Political instability led to depreciation of the country’s currency and a sharp reduction in currency reser ves. This in turn puts strain on the state budget and affects the ability of the country’s state grain buyer—the General Authority for Supply Commodities (GASC)—to regularly import sufficient quantities of wheat using the customary wh eat tenders.
In order to maintain an adequate food consumption level to avoid possible unrest, Egypt is increasing the procurement price for local wheat and is subsidizing its flour production. The Government’s hope is to get additional wheat from farmers. This, however, would drive down stocks, and thereby be at odds with the traditional policy of maintaining high wheat reserves.
Kenyan wheat imports are also reduced 0.2 million tons to 1.0 million, mainly because of the dwindling wheat supplies from Russia and Ukraine. Based on the recent pace of exports and continued price competitiveness enhanced by weak exchange rates, exports are in creased this month for the EU-27. Based on the volume of export licenses, EU-27 exports are projected up 1.0 million tons to 19.5 million, almost 20 percent higher than a year ago when EU-27 wheat output was 5.0 million tons larger.