World Grain - January 2013 - 47

FEATURE: MILLERS GATHER IN MIDDLE EAST

(Continued from page 40)
in response to the increasing precariousness of supply and price volatility.
Similarly, rising dependence on wheat
of variable quality from the Black Sea
countries and more recently India and
Pakistan has led to greater demand for
ﬂour additives which were offered by
another 12 ﬁrms exhibiting this year.
Many of these same companies also offer vitamin and mineral premixes since
most Middle Eastern countries have embraced mandatory ﬂour fortiﬁcation as a
public health measure.
Companies and organizations from
six continents displayed products and
services. As in the past, Turkish suppliers accounted for one quarter of all booth
space. Twenty European ﬁrms, half of
them German, were the second largest contingent. A new trend is the larger
number of exhibitors from companies
in the region besides Turkey. This year
there were 11 including six from the
United Arab Emirates, the host country.
TRADING SESSION
The speakers at the trading session on
the ﬁnal day enjoyed an especially large
audience as millers sought to understand
the circumstances surrounding the sudden spike in wheat prices again this year
and the relentless market volatility of
the past ﬁve years.
Six speakers focused on six major
grain exporting countries and regions, all
of which supply wheat to the Middle East
and Africa with Bill Tierney, chief economist of AgResources, as moderator. In his
own presentation on the global market
outlook, Tierney focused on the “historic
decline in wheat production and historic
decline in stocks.” He emphasized that
“essentially there is no stocks cushion to
stop prices from moving sharply higher.”
Countries are depleting their stocks
through exports, said Tierney, citing
USDA’s forecast that India will export
6 million tonnes of wheat this year. “If
E.U. wheat exports do not slow down,
the E.U. will have to import more corn
to replace wheat for feed.”
Swithun Still, director and senior
www.World-Grain.com / World Grain / January 2013

Joe Woodward, past president, IAOM, presents a plaque of appreciation to Ilias Assimakopoulos, CEO,
Agthia Group, the host company at the Gala dinner. Photo courtesy of David McKee.

trader of Solaris Commodities, Switzerland, covered the Black Sea countries,
which in the last decade have emerged
as a vital supplier of wheat to Middle
East and African countries, after being
a net grain importer during most of the
1980s and much of the 1990s.
“Egypt is almost a captive market for
Russia,” Still noted. “It is almost a symbiotic relationship. Russia needs Egypt’s
market, and Egypt needs Russian wheat.”
After exporting 26 million tonnes in
2011-12, Russia exported only 9 million tonnes through the ﬁrst 11 months
of 2012, with a maximum of 2 million
tonnes expected in the ﬁnal month.
“Russia’s domestic price is now more
attractive than the export price,” Still
said, adding that ice and cold weather
hinder logistics in the Black Sea, so that
exports could slow even further.
Neither Russia nor Ukraine will outright ban exports as happened in 2010,
but Ukraine could take “unofﬁcial measures” to slow the outﬂow, he predicted.
Despite harvest shortfalls in two of the
last three years, “it is expected and hoped
that RKU (Russian, Kazakhstan and
Ukraine) will be the world’s number one
grain exporter during 2020-40,” Still said.
Nick Poutney, GrainCorp regional
manager, presented the crop picture in

his country. “Australia has done a lot
of work in terms of making its export
program more efﬁcient in the last few
years,” he said, noting that in 2011-12
wheat exports were a record 27 million
tonnes out of a record 29-million-tonne
crop. For 2012-13, his company’s crop
estimate was for a more normal 20.3
million tonnes but with a higher share of
milling quality.
Port grain terminal operators “will be
allowed to sell up to 60% of port capacity up to three years in advance. Up to
now it was only one year,” Poutney said.
This will encourage investments in rail
infrastructure, helping to relieve transportation bottlenecks, he said.
Returning to the theme of crop shortages, Jean-Benoit Gauthier of the
Canadian Wheat Board (CWB) said
that precipitation in Canada for the new
crop is only 40% to 50% of normal, and
Ontario is the only production area in
the country that did not encounter major
weather problems.
Though it has lost its monopoly on exports of wheat from the Canadian prairie provinces, CWB still operates 130
wheat purchasing stations and remains
a key partner for many wheat growers,
Gauthier told the audience.
Nebraska grain grower Dan Hughes,
47

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World Grain - January 2013

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