Moisture maps of the Middle East this season are shades of brown, indicating precipitation has been below to well below average in that important grain growing region of the world.
Market analysts concur there will be increased grain imports and decreased exports in Turkey, Syria, Iran and Iraq in the coming crop year.
The United States Department of Agriculture estimates Middle East wheat production will fall 4.9 million tonnes in 2008-09, while barley production is expected to drop 2.1 million tonnes.
Those are considerable declines considering the 2007-08 totals were already reduced due to drought in Turkey and Syria last year.
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USDA said wheat and barley imports are expected to rise to 15.2 and 10.4 million tonnes respectively, up 39 and 30 percent from 2007-08 levels.
Exports are forecast to fall to 2.05 million tonnes and 50,000 tonnes respectively, which are minuscule levels for both crops.
Bruce Burnett, director of weather and crop surveillance with the Canadian Wheat Board, said the situation will create marketing opportunities for western Canadian wheat and barley farmers.
“I like to call it the luck of the draw for the year,” he said.
Canadian growers will benefit from the region’s increased imports. But with today’s high ocean freight rates, Canada has a logistical disadvantage compared to exporters in Australia and the Black Sea region.
Burnett is more encouraged by the prospect for vastly reduced exports from that major grain growing region. Syria is of particular interest because it is typically a large exporter of durum.
“The impact this year is somewhat twofold because they had a drought last year. Now we’re talking about another reduced crop,” he said.
A May 9 USDA Foreign Agricultural Service report said Syrian wheat production is expected to decline 38 percent, to its lowest level in the past 17 years.
Rainfall accumulations averaged 15 to 30 percent of normal for most of the primary wheat producing areas, or about 50 millimetres of moisture during the eight months between September 2007 and April 2008.
The Syrian government may need to buy more of the domestic crop, increase imports or allow a higher than normal drawdown of national reserves.
Iraq has been a substantive importer of milling wheat for a number of years and will need more than usual in 2008-09, said Burnett. It will come from a number of suppliers, including Canada, the U.S., Australia and the Black Sea region.
According to the USDA, Iraq is suffering one of the worst droughts in a decade. It is expected to cause a 51 percent decline in wheat and barley production compared to last year. Rainfall accumulations averaged between 28 and 40 percent of normal for most of the primary wheat and barley producing regions.
“A significant domestic grain supply shortage is expected, requiring sizably increased grain imports in the 2008-09 marketing year,” said the USDA in the May 9 report.
Iran has been an importer and exporter of grain in past years. It has been an occasional but never a regular or substantive buyer of grain from Canada, said Burnett.
Last year, Iran exported two million tonnes of wheat but he doesn’t expect it will be a big player in 2008-09.
“This region is going to be importing more grain than they did last year,” he said.
The USDA expects a “significant increase in grain imports,” noting that Iran’s government has reportedly already sanctioned the importation of two million tonnes of wheat.
Wheat production is expected to decline 20 percent to the lowest level in six years.
Burnett also anticipates a marked decline in the country’s barley production.
“They will be larger importers of barley in the upcoming year and that’s all feed barley of course,” he said.
There was no USDA Foreign Agricultural Service report on Turkey, but Burnett expects that country will import more wheat and durum because domestic production is suffering from dry conditions in the main durum growing region.
