Grains from the Black Sea region are set to provide support to bulker demand, with wheat and barley exports expected to rise sharply over the coming weeks and months, according to analysts. Danish grains consultancy BullPositions said that Ukraine’s harvest, which has just begun, raises hopes for a record export season. Wheat production in Ukraine is forecast to reach 28.5m-29.5m tonnes, with “the top range being a new record” and 4m tonnes higher than the harvest last year, while barley is estimated to increase by 1m tonnes compared with 2020 to reach 9m tonnes. “Both crops are intensively exported, with the additional production volume likely to be added to the export volume,” said managing director Jesper Buhl.

In addition, wheat and barley crops from Romania and Bulgaria are “looking increasingly good” with current forecasts breaching past records, pegged at above 18m tonnes in total. The 5m-6m rise from 2020 production levels “is likely to be entirely destined for the export market,” he said. The abundant supply will bring prices down, making Black Sea-origin grains more competitive.

Simpson Spence Young said that tonne-miles were being boosted by a shift in trade patterns. Exports from the Black Sea were being supported by demand growth in the Middle East and North Africa due to poor domestic harvests in Iran, Iraq and Turkey, the shipbroker said, adding that imports from the three countries are forecast to rise to 14.4m tonnes in the 2021/22 season from 11.9m tonnes last year. Egyptian wheat imports are also expected to rise to a record 13.2m tonnes.

Although Russian wheat exports are estimated below last year’s level, at 37.2m tonnes, it is still the third strongest on record and the country is “positioned to build on historical trade ties and increase shipments,” according to its research.  In June, Russia shipped its first wheat cargo since end-2015 to Algeria, given lower volumes from its primary supplier France, which had a smaller crop combined with its expanding trade with China, SSY said.

The third quarter will also see a peak in terms of barley exports from Russia and Ukraine. “Significantly from a tonne-mile demand perspective, in a reversal of usual trade patterns, the past marketing year saw a 2m-tonne annual jump in Ukrainian barley exports to China to 2.9m tonnes, while shipments to Saudi Arabia (previously the leading destination) fell to 300,000 tonnes,” SSY said.

“Trade data suggests Australian barley, shut out of China, displaced Ukrainian material in Saudi Arabia, with the latter redirected to China instead. With both Chinese (10.7m tonnes) and Saudi Arabian (6.7m tonnes) barley imports projected to rise this year, and no sign of Australian barley being readmitted to China, this tonne-mile boosting trade reversal looks likely to continue.”

With regards to corn, Ukrainian exports usually peak in the fourth quarter, with shipments “forecast to rebound sharply” to 29.6m tonnes from a three-year low of 23.2m tonnes, SSY said, adding that China accounted for 38% of volumes last year as exports to the country more than doubled to 8.8m tonnes.