Source: Ukragroconsult (Ukraine)
EU soft wheat exports are anticipated to decline in the 2024-25 season. Market conditions indicate lower volumes compared to the previous year. This decline is attributed to several factors influencing the grain market.
Factors Contributing to EU Soft Wheat Exports Decline
Firstly, increased competition from other major exporting countries plays a crucial role. Russia, for instance, offers competitive prices, attracting buyers. Therefore, EU exporters face pressure to lower prices. Secondly, unfavorable weather conditions in some EU regions have impacted wheat yields. These conditions subsequently led to reduced overall production. Thirdly, high domestic demand within the EU limits the surplus available for export.
According to Strategie Grains, the EU soft wheat exports could reach 28.8 MMT. This projection is down from 31.6 MMT in the 2023-24 season. However, it is slightly above the 28.5 MMT estimated in April. Moreover, FranceAgriMer forecasts even lower EU soft wheat exports, at 27 MMT. Their data indicates a more pessimistic outlook for the trading season.
Despite varying estimates, the overall trend points to a decrease. The EU Commission projects total soft wheat production at 120.5 MMT. This is compared to 126.4 MMT the previous season. Reduced production directly affects export potential. The Commission also expects higher ending stocks. These are projected to reach 14 MMT, up from 13.3 MMT.
Market Outlook and Price Sensitivity
The global wheat market remains highly sensitive to supply and demand dynamics. Furthermore, currency fluctuations and geopolitical events can significantly impact trade flows. Consequently, EU exporters must carefully monitor these factors. For example, a stronger Euro could make EU wheat less attractive to international buyers.
The Black Sea region remains a key player in the global wheat market. Russia and Ukraine are major exporters. The ongoing conflict introduces volatility and uncertainty. As a result, buyers are diversifying their sources. In conclusion, EU soft wheat exports face challenges in the 2024-25 season. These challenges are primarily from increased competition and decreased production. EU exporters need to adapt to these changing market conditions. Nevertheless, maintaining competitiveness will be crucial.