In the international context, at the level of the European Union, for 2020 a total wheat production is lower compared to 2019 due to the high temperatures in winter, which weakened the tolerance of the crop to frost and increased the potential for loss of yield.
In Russia, wheat production will reach an average of 80 million tonnes, the sown area being 16.5 million, which would mark a second consecutive annual growth.
If we look to Ukraine, Romania's second largest competitor, from the Black Sea, we will see that the wheat production 2020 is expected to decrease by about 3 million tonnes compared to 2019, due to the reduction of the cultivated area, but it remains at a high level, comparable to the average of the last 5 years. The area sown with wheat is officially estimated at 6.4 million hectares.
In Russia and Ukraine, the export prices of bakery wheat increased between October 2019 and January 2020, being impacted by increased demand on the export market. After this wave, February was marked by a decrease of about 8% due to the increased demands on the domestic market.
In the case of Romania, the export of the main cereal products, wheat and corn, has had an upward trend in recent years due to obtaining high domestic productions (both in physical volume and in qualitative level), as well as in the background of increasing competitiveness in the external market, especially in the Black Sea basin.
The old crop market for wheat, is beginning to become very attractive in terms of the evolution of prices that are in constant growth, last week, the food wheat won 6 euros / to.
Old crop corn is in a resting period both in terms of demand and price developments.
The new crop market for wheat continues to be on the rise, but quite temperate.
Updated information from Russia and Ukraine is expected regarding the status of crops, yields and quality parameters, and these data may influence the volatility of the cereals market in Romania.
There is another aspect, regarding the situation created by the Coronavirus Pandemic, all the ships coming from the red and yellow area, reached the loading, have the obligation to stay 14 days in quarantine, and this has a negative impact on the delivery period and the additional costs determined by the days of stay.
For more information, please contact Soufflet Agro Romania Cereal Purchase Manager, Daniel Niță, by phone: 0749 022 439, email: email@example.com.
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