Miller Magazine Issue 109 / January 2019

90 MARKET ANALYSIS MILLER / JANUARY 2019 imports from Sweden and Finland. Second biggest exporter is Australia. In 2018/19 exports volume expected at 350 MT but as per bed we- ather condition it will fall to 150 thnd MT. One of the worst droughts in history has reduced the Australian oat crop to the second lowest level in 36-year low and near the record low. ABARES today pegged 2018 oat produc- tion at 888 thnd MT, down 15.3% from last month and 20.7% below last year. The current estimate is 38% be- low the average. COCERAL’s released their final 2018 oat production estimates today. Total EU-28 oat production is pegged at 7 883 thnd MT, down 4.4% from their Sept estimate, but is down less than 1% from last year and is on par with the average. The extreme drought conditions this year did, however, have a huge impact on production in the top two EU oat exporters, Finland and Sweden, where production dropped a combined 29.2% from last year said the COCERAL estimates. Oat millers are from re- ports “making do” with quantities of oats from non-tra- ditional sources, including Spain, where production clim- bed 57% this year. China is the largest world consumer. Production for last 5 years increased from 255 thnd MT to 305 thnd MT, but imports fall from 500 thnd MT in 2017/18 to 150 thnd MT according last WASDE report. Australia re- mains the major oat supplier to China with a 96% market share. Canada, which accounts for 56% of total global oat exports, remains a non-player in the Chinese market due to the fact no import protocol has been put in place by the Chinese Government. The Canadian oat industry is working on obtaining the protocol, but no time frame is known. Breakfast cereals remain a small part of the overall breakfast market in China, but it is on the rise – and is expected to continue to grow. Since the beginning of 2018/19 TY, Ukraine sold 3.5 thnd MT of oats vs 9.4 thnf MT at previous season but much less than in 2015/16 TY that was 42.8 thnd MT. Main buyers for today are India (almost 2 thnd MT), Switzerland and Poland (both for 0.4 thnd MT). Last sea- son Ukraine main buyer was Pakistan which supply more than half of Ukrainian oats. RYE Rye, which is a family of wheatgrass, is very similar in ap- pearance to barley. The grains are thinner than the wheat, the husks are narrower, and the awns are rather short. The composition of rye, which is mostly regarded as bread flour and animal feed, contains carbohydrate, protein, potassi- um and vitamin B. The bread made from rye is also light as wheat bread. The protein mixes (gluten) found in wheat and rye flour makes it soft and elastic by swelling. There- fore, it is recommended that wheat or rye flour should be added while making bread from other cereals. Annual rye production fall from 14 459 thnd MT in 2014/15 to 12 293 thnd MT in 2017/18, and majority of this provided by EU and Russia. According to the es- timates of USDA for 2018/19, EU takes first place with 6 600 thnd MT in global rye production of 10 514 thnd MT. Russia with 1 850 thnd MT, Belarus with 650 thnd, Canada with 235 thnd MT, Ukraine with 400 thnd MT, Turkey with 320 thnd MT, and USA with 214 thnd MT follow EU countries respectively. The decline is expected in any leading rye producer countries except for Russia, Canada and USA. Majority of rye is consumed where it is produced. Therefore, consumption amount and the ranking of the countries are nearly the same with the production. The- refore, the global rye trade is decrease from 469 thnd MT in 2017/18 TY to 355 thnd MT in 2018/19. Approximately half of the global rye trade in 2017/18 season (227 thnd MT) was exported by Canada. EU exported 90 thnd MT, and it’s expected that 2018/19 Canada fall to 150 thnd MT and EU rise to 100 thnd MT. Russia was the second largest exporters which supply 110 thnd MT previous season, but as per lover produc- tion Russian exports will fall to 30 thnd MT and will be equal to Ukrainian supply. As it is understood from the difference between pro- duction and consumption, the largest share of imports of rye is in the United States. Rye import amount carried out in the USA in 2017/18 season was 325 thnd MT. This is estimated to be around 200 thousand tons in 2018/19 season. In global rye imports in 2018/19 season, EU countries follow USA in import with 50 yhnd MT, Russia need additional 25 thnd MT. Rest of all another main buyer will be almost at the same level. As for Ukrainian exports, from the beginning of 2018/10 TY rye trade twice more than 2017/18 TY: 64.7 thnd MT vs 38.2 thnd MT. It’s also twice more than WASDE forecast for this season, but we should keep in mind that WASDE treading year begin at October.