Black Sea wheat buyers shift to the Baltic

Disruptions to grain exports from the Black Sea region are prompting importers to increasingly seek alternative wheat supplies. About 1 mln tons of wheat have already been booked for shipment from ports in Latvia, Lithuania and Estonia in August, up around 50% year-on-year. In July, bookings tripled compared with a year earlier.

Demand is rising particularly among buyers that traditionally source Russian wheat. These include Turkey, the UAE and Sudan. At the same time, demand has also strengthened from traditional buyers of Baltic grain, including Nigeria and South Africa.

The shift in trade flows comes amid reduced supplies from Ukraine and Russia due to disruptions to shipping and port infrastructure. Market participants say that if Black Sea export conditions do not improve in the coming weeks, the Baltic region could increase shipments to less traditional destinations, including Turkey, Sudan, Libya and Egypt.

The Baltic states have sufficient supplies to expand exports. Unlike several other EU regions where crops were damaged by summer heat, wetter weather benefited production in the Baltics. CM Navigator estimates that Latvia, Lithuania and Estonia will have around 6 mln tons of wheat available for export this season.

However, the Baltic region’s ability to replace Black Sea supplies is constrained by prices, as Baltic wheat remains more expensive than Russian grain, keeping some importers on the sidelines. Still, the sharp decline in exports from Ukraine and Russia is increasing the need for buyers to secure alternative supplies.

Tags: Ukraine, Russia, Black Sea region, wheat