Exports from Romania rising Many Middle Eastern countries now favour grains grown in the European Union over the United States
LONDON/CHICAGO (Reuters) — The European Union’s prominence as a wheat exporter is growing as Romania joins its traditional top wheat suppliers, France and Germany.
“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.
Romania joined the EU in 2007.
It emerged as a major supplier to Egypt during the 2013-14 season and is geographically well placed to serve other customers next year such as Turkey, where the crop has been damaged by drought.
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“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.
“I think Romania is one of the up and coming stars and could be a good origin for Turkey,” she said.
The Middle East was once a big market for American wheat, but its presence has declined because of politics, smaller U.S. wheat crops as producers turn to corn and soybeans and the closer proximity of European and Black Sea wheat.
“One example is Jordan, which only 10 years ago was almost part of the U.S. domestic market,” a European grain trader said.
“Now the U.S. hardly gets a look in against competition from cheap Black Sea supplies.”
Many markets in the Middle East are now largely lost to the United States, and the next battleground may be Asia.
“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,” said Shawn McCambridge, a senior grains analyst with Jefferies Bache.
“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.”
South Korean feed-makers are among those increasingly looking toward EU and Black Sea suppliers.
“Currently we are expecting more supplies from Europe and the Black Sea as we hear good harvest forecasts,” a source at one of South Korea’s major feed-makers said.
“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.”
