PARIS (Reuters) – Strategie Grains consultancy lowered its monthly forecast for European Union soft wheat exports in the 2021/22 season on Thursday, arguing that Russian shipments had held up better than expected in the face of Western sanctions following the invasion of Ukraine.
The French firm now estimates EU soft wheat exports for the season ending June at 29.9m tonnes, 1.5m tonnes, or 4.8%, below its April forecast.
Russia’s February invasion of another grain-exporting country, Ukraine, crippled Ukrainian shipments and triggered Western financial sanctions that increased uncertainty about Russia’s ability to export grain.
However, data has since shown that Russian shipments have recovered from the drop and are expected to fill a quota set by Moscow for the latter part of the season.
The EU’s reduced export outlook should allow the bloc to show a wheat surplus at the end of the season, Strategie Grains said in its monthly grain report.
The consultancy raised its forecast for EU soft wheat exports next season to 30.8 million tonnes from 30.3 million, but also said Russian competition limited the bloc’s potential to supply a global market, which faces a protracted loss of Ukrainian exports.
The EU is also expected to shed a wheat surplus by the end of 2022/23, despite a smaller anticipated crop, with high prices linked to the Ukraine war dampening demand, Strategie Grains said.
The consultancy lowered its forecast for EU common wheat production in 2022/23 to 126.2 million tonnes from 126.7 million last month and compared with 130.3 million in 2021/22.
The revision reflected a reduced estimate of the area under cultivation, but Strategie Grains warned that dry conditions in Europe, particularly France, also threatened yield potential.
The firm cut its forecast for EU barley production in 2022/23 by 200,000 tonnes to 51.7 million tonnes, and lowered the estimate for the bloc’s maize output by 400,000 tonnes to 66.7 million tonnes.
(Reporting by Gus Trompiz. Editing in Spanish by Marion Giraldo)