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Ukrainian Grain & Oilseed Market

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World flour exports reach record for third year

07.09.2010 10:33 "Agro Perspectiva" (Kyiv) — For the third straight crop year, world trade in wheat flour established a new record in 2009–10, according to revised data just issued by the International Grains Council (IGC) in its August Grain Market Report. At the same time the council placed world flour trade in the year just ended at a new peak, it forecast a nearly 8% decrease in the 2010–11 season just under way. According to the IGC, global flour exports in 2009–10 aggregated 13,150,000 tonnes in wheat equivalent (210 million cwts in terms of wheat flour), a new peak for the third year in a row. The revised estimate for 2009–10 was up 819,000 tonnes, or 7%, from the prior export peak of 12,331,000 in 2008–09 and was 11% more than the first recent peak of 11,849,000 in 2007–08. It was only in 1995–96 that world flour exports first exceeded 10 million tonnes of wheat equivalent, reaching 10,136,000. The record-setting pace of flour exporting in the past decade was underscored by the way flour exports decreased from the peak in the mid-1990s to reach a recent low of 8,824,000 tonnes at the start of the new century in 2000–01. From that nadir, exports in 2009–10 showed an increase of 49%. In its first forecast of global flour trade prospects for 2010–11, the IGC pointed to a total of 12,160,000 tonnes in wheat equivalent. That would be down nearly 1 million tonnes from the record of 13,150,000 estimated for 2009–10, and would also be exceeded by 12,331,000 in 2008–09. Except for those two years, the prospective volume in 2010–11 was the largest. A year ago, the council forecast 2009–10 world flour exports at 12.4 million tonnes, which turned out to be a minimal 700,000 tonnes on the low side. Not included in the IGC export flour data are shipments of durum semolina. Durum semolina exports in 2010–11 are forecast at 200,000 tonnes of wheat equivalent, unchanged from 2009–10 and compared with 203,000 in 2008–09 and 194,000 in 2007–08. The IGC attributed the prospect for a decrease in global flour trade in 2010–11 to expanded milling capacity in several importing countries. Indeed, it pointed to reduced takings by all of the leading flour importing countries in 2010–11 as compared with the preceding season. The sharpest import demand decrease was forecast for Afghanistan, the country that has been the leading flour destination for several years running. It projected Afghanistan imports in 2010–11 at 1.4 million tonnes of wheat equivalent, against record takings of 1,750,000 tonnes in the previous season and 1,425,000 in 2008–09. Uzbekistan was forecast to import 1.2 million tonnes in 2010–11, down 300,000 from, its record takings in 2009–10. Iraq, which accounted for imports of 1,250,000 tonnes in 2009–10, was forecast to take 1.1 million in the new season. Indonesia, a country that had recently built sufficient milling capacity to supply its needs, emerged as a ranking importer in 2009–10, taking 1 million tonnes in wheat equivalent of flour imports. That countrys imports were projected to dip to 800,000 in 2010–11. The latter would be in line with its imports in the preceding several years. Partially offsetting these expected flour import decreases by leading importers were gains in several countries and regions. North African imports were forecast at 620,000 tonnes, up 100,000 from the previous season, largely due to an expected rise in Libya imports. Tajikistan was forecast at 650,000, also up 100,000. When it comes to exporters, Kazakhstan once again held the dominant position in world flour exporting. Its exports in 2009–10 soared to a new record of 3.5 million tonnes of wheat equivalent (equal to 56 million cwts of flour), compared with 2,733,000 in 2008–09 and 2,054,000 in 2007–08. Kazakhstan accounted for 27% of global flour exports in the year just ended. Not so incidentally, that share of global flour trade was less than half of the 56% share the European Union held in 1996–97 when its exports peak at 6,249,000 tonnes. From that high, E.U. exports fell to a low of 1,227,000 tonnes in 2007–08. A small rebound to 1.4 million was forecast for 2010–11. The IGC forecast that Kazakhstan will continue as the leading global flour exporter in 2010–11, shipping 3.2 million tonnes in wheat equivalent. This countrys exports primarily went to Uzbekistan and Afghanistan. Holding to a second place was Turkey, which exported 2,602,000 tonnes of wheat equivalent in 2009–10, up 20% from 2,161,000 in 2008–09. It was forecast to ship 2.3 million tonnes in 2010–11. According to the IGC, competitive pricing by Turkey on flour exports meant that it opened new markets in Asia. The council attributed the decrease in E.U. exports in 2009–10 to reduced sales to Cuba, Indonesia and Libya. On the other hand, U.S. exports in 2009–10 reached 580,000 tonnes in wheat equivalent (more than 9 million cwts), up 49% from 388,000 in 2008–09 and the largest U.S. exports since 667,000 in 2002–03. U.S. exports last exceeded 1 million tonnes in 1999–00 with an outgo of 1,399,000. The council attributed the rise in U.S. exports to «strong sales to Mexico and South Africa.» The most dramatic change among flour exporters was the council forecast that shipments from Russia will fall to a minimal 10,000 tonnes in 2010–11 as a result of the government-imposed export ban in the wake of the drought-curtailed wheat crop. Russia shipped 400,000 tonnes of flour in wheat equivalent in 2009–10, which was down from 665,000 in 2008–09.

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