Romania’s grain crop
BUCHAREST (Reuters) – Romania is placing its hefty grain surpluses in lucrative EU and Middle East markets this season as a good crop knocks down prices, traders said. The Black Sea state reaped 7.32 million tons of wheat last year, only slightly below a three-year record high set in 2004 and despite last summer’s destructive floods, the worst in 50 years. «Grain prices fell enough to allow smooth export deliveries,» said Roxana Chivu, who represents a Swiss grain trader in Romania. «So far there have been feed wheat shipments to the EU and milling wheat is to start soon.» Ioan Scurteli, general secretary of the Romanian grain wholesalers’ association, said: «It’s a good harvest despite floods. It’s feasible to export one million tons this year.» He said wheat was selling for as little as $75 a ton in some areas in Romania. Traders said ex-silo wheat prices fell as low as $80-$90 a ton from over $110 a year ago, while free on-board prices in the Black Sea port of Constanta ranged from $105 to $115 for various qualities of cereal. Officials have said extensive floods, which destroyed 600,000 hectares of crops including pasture and vegetables last year, also led to a downgrade of 30 percent of the country’s wheat crop to feed from milling quality. In 2004/05 Romania shipped out only 1 percent of a 7.7-million-ton harvest, chiefly to its most lucrative markets in Turkey and the Middle East, because domestic prices sharply exceeded international levels. Traders blamed the ex-communists who lost the 2004 polls for setting an indicative price for domestic deals of 5,500 lei ($0.18) per kilo, which prevented exporters from buying cheap grain from farmers. Currently, Romania does not use indicative prices for wheat. The European Commission confirmed on Thursday that it had granted 592,000 tons of licenses under the first tranche of its annual wheat import quota. Western traders said the wheat would mostly come from the Black Sea region and possibly South America. However, some traders said ample cereal supplies in Western Europe might further depress global prices, stiffen competition and make Romanian exports less competitive. «There’s overproduction (in Europe). And this might keep demand low,» said Veronica Serb director of trader Comcereal, which operates in Constanta. «An export bonus could become a badly needed boost,» another trader said.
