Ukraine and EU wheat may benefit from ongoing Russia/Turkey dispute
Industry observers have suggested growers in the EU and Ukraine could benefit from the dispute that included the destruction of a Russian military aircraft last month, and this week saw a Russian warship fire warning shots at a Turkish fishing boat in the Aegean Sea.
Although there are currently no restrictions on Russian exports to Turkey, grain shipments were said to have been put on hold for a short period following the shooting down of the Russian jet, and earlier this month the UK’s Agriculture and Horticulture Development Board (AHDB) reported that Turkish dealers were not signing new trade deals.
Second largest importer
In addition to Russia, Turkey also imports wheat from Ukraine – which is priced roughly in line with Russia - and in lesser quantities from EU countries including Romania and Germany. Turkey is the second largest importer of Russia wheat, taking around 18% of its exports, behind Egypt, which takes around 30% [Mintec].
“In light of recent tensions between the two nations, Turkey may turn to importing a greater quantity of wheat from Ukraine but there could also be an opportunity for EU wheat,” wrote AHDB Market Intelligence analyst Millie Askew two weeks ago. “With EU wheat export commitments slightly sluggish and down on the same point last year, an opportunity to ship more to Turkey would be a good option for the EU.”
Commodities analysts Mintec this week told BakeryandSnacks there was, as yet, no evidence that Turkish imports of Russian wheat had slowed, adding France could benefit should Turkey begin buying elsewhere.
Good production from Black Sea
“France has had a good production year and consequently has high exportable stocks,” said a Mintec spokeswoman. “The weak rouble/hryvnia and good production from the Black Sea region has made it difficult for French wheat to increase its exports out of its traditional markets.”
With Turkish wheat imports accounting for less than 3% of global wheat trade, observers do not expect a potential change in Turkish sourcing to affect the wider market.
“Given current over-supply from Russia and the EU, as well as US and now Argentina, I am not sure there will be any impact aside from perhaps short-term difficulty for one or two operators who may have contracts in place,” said one trader.
