Good market prospects for Bulgarian grain producers

Global production of wheat will fall this year because of the adverse weather conditions, according to the latest forecast of the International Grains Council. “Lower yields are expected in the Black Sea region as well, which will be to the advantage of Bulgarian grain producers,” said Antonina Belopitova, Director of the Sofia Commodity Exchange. The 2012-2013 wheat crop worldwide will probably reach 671 million tones, or 24 million tonnes less than the previous harvest. At the same time, global demand is projected at 681 million tonnes, or 10 million tonnes higher than the supply. The main factors for the shrinking production and reduced stocks of milling wheat are the frozen crops in the European countries, Russia, the Ukraine and Kazakhstan, as well as the long drought spell in the US.

The yield in EU countries is expected at around 132 million tonnes, a record-low for the last four years. At the same time, big buyers in Italy and Spain delay their purchases for lack of money. “This situation and the dipped supply in the Black Sea region, in particular, can be to the advantage of Bulgarian producers who will be able to sell their high-quality wheat at a good price. Currently, a tonne of wheat in Bulgaria costs around BGN 360. The year-on-year drop in the price is some 11%, compared to a 26% decline in Hungary and 19% - in the Ukraine,” commented Belopitova. According to her, wheat production in our country will be 3.7 million tones at most this year, down from 4.2-4.3 million tonnes last year. Currently, Ukrainian wheat is traded at $226 per tonne on average and Commodity Exchange prices in Hungary are around $232/tonne. These price levels are reflected in the price of flour as well, which has decreased by some 11% -12% on an annual basis.

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