Dubai Chamber: A 20% increase in wheat imports from Russia, Canada and Australia

UAE imports of cereals grow during the 'Corona' pandemic

The Dubai Chamber invites companies to study changes in the global grain market and to quickly interact with them.

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A report by the Dubai Chamber of Commerce and Industry revealed that the UAE’s imports of grain recorded a growth during the outbreak of the new Corona virus (Covid-19), to ensure food security in the country, as the value of its wheat imports increased by two digits in the first half of 2020, and an increase Minor in imports of corn compared to the first half of 2019.

Wheat and corn

According to the report, the value of the state's imports of wheat from Russia, Canada and Australia in the first half of 2020 amounted to about $ 146.7 million, a growth of 20% compared to the same period in 2019.

The data released by the Dubai Chamber indicated that although wheat imports from Canada and Australia were lower in the first half of 2020, imports from Russia increased by 79% during the mentioned period.

As for the UAE's imports of corn from the United States, South Africa and Brazil during the first half of 2020, they increased by 1%, while imports of corn from the United States registered a growth of 245% compared to the same period last year.

State of uncertainty

The "Dubai Chamber" report called on companies operating in the grain trade in the Emirates to study these current and future changes in the global grain market, and to quickly interact with them, to ensure high levels of food security in the country.

He pointed out that the increasing spread of the pandemic in the world during the past few months has created a state of uncertainty in the production, trade and consumption of grain products, and supply and demand shocks have caused their prices to fluctuate, but this disturbance was minimal due to the availability of a large global stock of grains, and the high harvest in a period Before the epidemic.

International price of corn

According to commodity price data issued by the World Bank, the average global price of corn in October 2020 reached its highest level, reaching $ 187 per metric ton, with a growth rate of 12.4% over the previous month.

Despite this, the average price of corn for the period between January and October 2020 was about $ 160 per metric ton, or 6.3% less than the same period in 2019.

Global trade restrictions

According to the Dubai Chamber report, to ensure food security, several countries applied trade restrictions on grain exports during the Corona crisis, as Sudan, on April 15, 2020, temporarily banned the export of corn.

Russia, which is one of the largest wheat exporters in the world, has also implemented a quota system for its wheat exports during the period from April to June 2020.

Other countries, which are small exporters of wheat, such as Oman, Tajikistan and Kyrgyzstan, banned the export of wheat during the closure period.

As for the rice market, there were many export restrictions by the largest rice exporters, which was reflected in the global price of these grains, as Cambodia and Myanmar banned the export of rice during April and May 2020, and Vietnam implemented a quota system in exporting rice during this period.

The report stated that although there is no official government ban on exporting rice from India, many suppliers have stopped signing new contracts for exporting it since the beginning of April 2020.

The report pointed out that, based on data from the World Bank, it can be observed that export restrictions clearly affected rice prices, but their effect was very small on other major grain products during the epidemic period.

Production forecast

According to data released by the US Department of Agriculture, global corn production is expected to reach about 1158 million metric tons in the 2020/2021 marketing year, 4% higher than the previous season.

As for rice production, it is estimated at 501 million metric tons, and production will increase, especially in India and the Philippines.

Global wheat production is expected to reach 773 million metric tons in the 2020/2021 season, but production will grow by only 1% compared to the previous season.

The report pointed out that during the outbreak of the epidemic, global stocks of grains were at comfortable levels, indicating that many countries are planning over the next six months to increase their stocks of grains, especially wheat.

According to the USDA, wheat stocks are expected to be around 321 million metric tons, followed by maize (300 million metric tons) and rice (179 million metric tons).

Shipping sector

The report revealed that the shipping sector faced many challenges during the year 2020, starting with the implementation of new fuel-related regulations, which affected the increase in shipping costs during (January-February), according to the World Grain Council.

The drop in fuel prices contributed to the decline in freight prices in the main countries of origin of grains and oilseeds, which was reflected in a monthly decline of 7% in the index of shipping grains and oilseeds issued by the Council.

During the third quarter of 2020, freight costs began to rise, due to the easing of closure measures and the start of the harvest period, which increased grain trade.

Expected exports

It is expected that global exports of rice in the marketing year (2020/2021) will reach about 44 million metric tons, an increase of 5% over the previous marketing year.

According to the US Department of Agriculture, world corn exports are expected to reach 184 million metric tons, with a growth rate of 8% compared to the 2019/2020 season.

World wheat exports in the season (2020/2021) will be the highest among the main grain products, as it is expected to reach 189 million metric tons, but it will be slightly lower compared to the previous season.

International prices for wheat

The Dubai Chamber report stated that despite some trade restrictions in the global wheat market, fluctuations in the average global price of wheat were not an estimated thing, according to the World Bank.

He added that the average price of American soft red wheat, in October 2020, reached about $ 245 per metric ton, an increase of 11.6% over the previous month.

The average price of soft red American wheat during the first 10 months of 2020 was 6.9% higher than the price in 2019.

International prices for rice

International rice prices were subject to significant fluctuations, especially during the lockdown period.

The average price of Thai rice increased from 450 dollars per metric ton in February 2020 to 564 dollars per metric ton in April, an increase of 25%.

After the export restrictions on rice were ended, prices began to decline slightly, reaching $ 471 per metric ton in October 2020. The average price during the January-October 2020 period was 18.8% higher than the same period in 2019.

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