Grain ban, shortage opportunity for U.S. sorghum, corn

by World Grain Staff
Share This:

WASHINGTON, D.C., U.S. — The U.S. Grains Council (USGC) said that it received word on Aug. 11 that Israel purchased 40,000 tonnes (1.6 million bushels) of U.S. sorghum, with intentions to purchase 60,000 to 80,000 tonnes (2.4 to 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, the USGC said.

Continued dry conditions in Ukraine have seriously damaged its corn crop, with reported losses between 4 to 5 million tonnes (157 to 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 August 20.

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

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

Historically, Russia exports between 6 to 7 million tonnes 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, the USGC said. This will impact next year’s 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 U.S."

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

Partners