Miller Magazine Issue: 130 October 2020

60 COVER STORY MILLER / OCtOber 2020 UkrAgroConsult forecasts 2020/21 exports at 17.5 MMT. 4.1 MMT was already shipped abroad during the first two months of the season (down 14% on the year, but up 17% from the five-year average). Traditionally, the main export destinations are Indonesia, Bangladesh and Egypt. Other active importers include Morocco (up five times from a year ago) and South Korea (up three times). Pakistan purchased 203 KMT of wheat from Ukraine in August, for the first time since November 2014. According to real-time data (the State Consumer Pro- tection Service), exports as of September 21 were already above 7.5 MMT. They picked up to 3% behind last year. The export share of milling wheat increased to 81% from last year’s 72% (a consequence of dry weather). KAZAKHSTAN: PRODUCTION AND EXPORTS Because of drought, heavy wheat crop losses were predicted in Kazakhstan in the 2020/21 season (like in 2019/20). However, the key grain growing regions re- ceived abundant August rainfall that replenished soil moisture. Reportedly, the soil in some areas was even too wet, causing kernels to blacken and germinate that could affect the grain quality. On September 22, the Ag Ministry of Kazakhstan re- ported that farmers had harvested 14.8 Ml ha (93.4% complete). The current average yield increased by 11% from a year ago, to 1.23 MT/ha (1.11 MT/ha in 2019). As of the reporting date, the crop was at 18.2 MMT, or above the Ministry’s own estimate of 18 MMT. There- fore, a new target was set, at 20.5 MMT. UkrAgroCon- sult considers the Ag Ministry’s new forecast of 20.5 MMT too ambitious. According to our estimates, grain production may reach 18.1 MMT (in net weight), includ- ing 12.2 MMT of wheat. The Ag Ministry says the above-mentioned wheat quality concerns have not come true either, because the harvested grain is good: almost 84% out of the examined 3 MMT of wheat was attributed to grades 1-3, whereas in 2019 this percentage equaled 67%. In addition, high gluten content was reported: the wheat share with glu- ten above 28% was 59 % vs 43% last year. The Ministry believes this will contribute to wheat export growth in MY 2020/21. We expect grain exports from Kazakhstan to be at roughly the same level as a year ago – 7.6 MMT, with 6 MMT of this volume represented by wheat (including flour in grain equivalent). The main destinations for Kazakh exports include Central Asian countries, but official representatives of Kazakhstan have made active efforts in recent years to set up trade with China. A disappointing crop limited the country’s export potential in MY 2019/20 and even forced Kazakh companies to import wheat from Russia (officially some 500 KMT, UkrAgroConsult’s estimate is 1.1 MMT). We believe wheat imports in the new season will return to their previous levels (i.e. reduce to buy- ing foreign seeds and border trade within the Customs Union), totaling at most 200 KMT. BARLEY Prices Black Sea barley price has already exceeded the point of USD 200/MT FOB (up USD 25 from a year ago). Bar- ley price is moving following those of wheat and corn,