Wheat market in North Africa: share of Black Sea countries exceeded 50%

According to USDA estimates, North African countries reduced wheat imports to 27.5 MMT in MY 2017/18 following all-time record imports in the 2016/17 season (28.3 MMT). The reasons for the drop in foreign purchases included a 37% rise in own wheat production in North Africa.

It should be pointed out that supplies from the Black Sea region (Russia and Ukraine) continued to grow steadily, unlike those from Canada, Australia, the EU and the US, UkrAgroConsult’s analysts note.

Increased production in Algeria and Morocco contributed to a fall in imports from their traditional supplier, i.e. the EU. In addition, the EU faces strengthening competition from Argentina in the Algerian market.

In the Egyptian market, the EU is still pressed by the Black Sea countries. Although Egypt stepped up own production, growing consumption in the country pushes up wheat imports all the time.

Russia’s share in supplies to key North African destinations expanded by 6%, to 36%, making this country the 2017/18 leader. As for Ukraine, in the 2017/18 season, Ukrainian supplies to North Africa were limited mostly by a drop in Ukraine’s export potential along with stiff price competition from Russia.

The USDA forecasts a bumper wheat crop in North Africa in MY 2018/19, which may exceed the mark of 20 MMT for the first time on record. The countries in the region continue reducing their purchases from abroad. This will result in stiffer competition among the top exporters to North Africa: Russia, Ukraine and the EU. Export availabilities in all of these countries are lower than last year, but Black Sea offers retain their price advantage.