The decline in Black Sea exports creates additional opportunities for competitors. At the same time, the USDA raised its forecast for wheat exports from Canada and Kazakhstan by 1 million metric tons for each country—to 28.5 million and 10 million metric tons, respectively. Thus, some of the volumes that Ukraine and Russia will be unable to supply to the global market due to logistical problems may be replaced by grain from other major exporters.
Supply constraints from the Black Sea region are already affecting global prices. Compared to July levels, export prices for wheat in the EU have risen by $25/metric ton (to $262/metric ton), in the U.S. by $26 ($321/metric ton), in Canada by $20 ($292/metric ton), in Australia by $13 ($291/metric ton), and in Argentina by $12 ($239/metric ton).
At the same time, demand among importers is changing significantly. For the UK, the procurement forecast has been increased by 1.1 million metric tons at once—to 3.6 million metric tons—due to the worsening outlook for domestic production. The forecast for Pakistan has been revised even more sharply—from 10,000 metric tons to 1 million metric tons—amid high domestic prices and the government’s plans to resume imports. Afghanistan’s imports have been raised by 200,000 metric tons—to 4.8 million metric tons—due to rising consumption.
At the same time, a number of major buyers will reduce their purchases. Egypt’s wheat import forecast has been lowered by 0.5 million metric tons—to 13 million metric tons—due to a large harvest and higher opening stocks, and Turkey’s forecast has also been lowered by 0.5 million metric tons to 5 million metric tons due to significant domestic production. For Bangladesh, the estimate has been lowered by 0.7 million metric tons to 7 million metric tons, and for Vietnam, by 0.3 million metric tons to 6.2 million metric tons due to weaker demand for feed wheat.
