Will the Black Sea agricultural products be MENAced in the new season? – Atria Brokers




The poor harvest in the EU and North Africa affected significantly the trade flows of grain in the MENA region in 2020/21 MY. In addition, the stratospheric prices of grains and vegetable oils discourage buying at a time when the production of new-crop oilseeds looks optimistic. What will be the realignment of forces in the near future?

Christina Serebryakova, head of the analytical department and broker of Atria Brokers, summed up the results of the current season and outlined the prospects for trade with Black Sea grains and oils in 2021/22 MY in the context of key features and the level of competition.

- Christina, what are the key points regarding the competition on the wheat market in the MENA region you can highlight?

- First of all, I want to say that Russian wheat traditionally dominates the market of the Middle East. At the same time, a decrease of supplies to Turkey was offset by higher export to Iran, Israel and Yemen. The decline of wheat crops in the EU and Ukraine in 2020/21 MY weakened their positions on the Turkish market. Besides, the poor harvest in the EU (particularly France and Romania) allowed Russia became a leading supplier of wheat to North African countries, particularly to Egypt. Head of the analytical center at Rusagrotrans JSC, Igor Pavensky noted that Russia started exporting wheat to Jordan “for the first time since 2018/19 MY”. At the same time, Russian wheat is virtually absent in Algeria and Morocco due to the strict phytosanitary requirements. Let me remind that after a long-lasting negotiations Algeria softened its requirements as to the share of bug-ridden grain from 0.1% to 0.5%. It is still tough requirement for Russia. In turn, Ukraine managed to take over the share of European wheat in Morocco. However, given the recovery in wheat production in Morocco in 2021, Ukraine will not be able to repeat such a success in the new season. As early as May 15, 2021, Morocco has raised the import duty on wheat from 0% to 135%.