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US Sees Opportunities for Sorghum, Maize

by 5m Editor
16 August 2010, at 11:34p.m.

US - The US Grains Council received word last week 11 August that Israel purchased 40,000 metric tons (1.6 million bushels) of US sorghum, with intentions to purchase 60-80,000 tons (2.4-3.1 million bushels) in the near future.

This purchase is a direct result of the recent agricultural export ban in Russia and the short supply of grain in Ukraine, where Israel generally fulfills its import needs.

Continued dry conditions in Ukraine have seriously damaged its corn crop, with reported losses between 4-5 million tons (157-197 million bushels). Ukraine’s president has informally announced that major grains such as wheat, barley and corn will need quotas imposed for export beginning 20 August.

It is estimated that Israel’s imports of US sorghum will increase by about 65 per cent, reaching approximately 100-120,000 tons (3.9-4.7 million bushels). This will bring the US market share of sorghum to Israel to about 85 per cent this calendar year. Corn imports are also expected to increase, reaching 1.5 million tons (59 million bushels). The US market share for corn in Israel will increase to about 30 per cent, compared to last year’s 10 per cent share.

While the Russian Statistics Committee estimates Russia’s domestic wheat production at 70-75 million metric tons, a 15 million ton reduction from earlier estimates, the Council estimates that number to be roughly 65-68 million tons. This change in grain balance will inevitably have a serious impact on grain prices and Russian government policy.

Historically, Russia exports between 6-7 million tons from August through December. Because of the current ban, this figure will need to be filled by other sources. While the world’s supply will be able to cover the deficient, the more difficult problem will be if there is no rain in the next six weeks. This will inhibit Russia from planting its winter wheat crop, effecting its ability to export. This will impact next years global grain market in a significant way.

“While the price of grain in Russia is high, it is expected to go higher so no one is selling. This leaves many Russian animal farmers in a panic and fearful of the situation,” said Alex Kholopov, USGC consultant. “Some of the top Russian corn consumers believe there will be not enough grain in Russia this year and are making plans to import corn from other countries, such as the United States.”

USGC Regional Director in the Middle East Joe O’Brien said, “These recent developments in Russia and Ukraine could help US market share in other countries as well, such as Saudi Arabia, and help increase the exports of US sorghum to the Middle East.”