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By Polina Devitt and Hallie Gu
MOSCOW / BEIJING (Reuters) – Trade conflict between the United States and China could be boosted by booming grain and oilseed exports from the Black Sea region, traders and analysts said.
New opportunities to sell wheat, corn and soybeans to China and the European Union are set to open up for the region's main exporters Russia, Ukraine and Kazakhstan, whose recent ascendancy has already finished full US dominance in markets such as Nigeria Mexico City.
The United States and China slapped tit-for-tat duties on $ 34 billion of each other's imports on Friday, with Beijing accusing Washington of triggering the "largest-scale trade war."
The Black Sea region's share of the international wheat market climbed to about 37 percent in 2017/18, according to the International Grains Council, comfortably topping the United States and Canada combined.
China is the world's top wheat producer, but still imports about 4 million tons of grain each year. [19659002] In the 2017/18 season (June / May) the United States exported 902,400 tons of wheat to China, down from 1.56 million in the prior season, according to US government data.
For the sake of rice, the pick-up in Chinese imports started in Beijing's Belt Road policy and before the trade dispute took off, but the tariff row accentuates the trend.
"We have just started buying wheat from Kazakhstan this year," said Chinese wheat trader said. "If we're good, we will increase imports for sure."
"Now that you can not bring in American wheat, it gives us more incentive to buy from Kazakhstan. "The success of Kazakhstan in the production of a certain volume," the trader added.
Among the risks for this strategy are difficult logistics and unstable quality in Kazakh and Russian Wheat, said another trader Who has been looking for more? Kazakhstan wheat deals.
Black Sea wheat may not be able to fully replace its U.S. counterpart due to different quality grades, it is synonymous to some Canadian wheat traders, he added.
According to statistical data, Russia and Ukraine, whose traditional buyers had been in North Africa and the Middle East, boosted wheat supplies to Vietnam, Indonesia, the Philippines, Spain, Tunisia, Tanzania, Sudan, Oman, Mexico and Kenya in the 2017 / 18 season.
One location in which Russia has taken away from US wheat market share is Nigeria, which like Brazil traditionally favors a higher-protein grain such as US hard red winter.
PRICES LOUDER THAN WORDS
In a sign that may worry some US wheat traders further, Brazil bought in the United States for the first time in
"In this new era of trade talks," said Swithun Still, director of Solaris, which specializes in trading Russian agricultural commodities
"It's likely that China will be buying more grains and oilseeds from the Black Sea and more beans from South America. , "he added.
The trade spat could also boost exports of Black Sea corn and soybeans.
Russian authorities recently reported a record 850,000 tons of soybean exports to China in July 2017-May 2018, more than double the 340,000 tons a year earlier, Svetlana Malysh, Kiev-based Black Sea agriculture market analyst at Thomson Reuters, said.
"Black Sea countries, mainly Russia, may intensify their selections to China in case of any U.S. deliveries' disruption," she added.
The trade conflict is also a chance for Ukraine to boost supplies of its corn to the European Union, which imposed a 25 percent import duty on U.S. corn in June, Malysh said.
China can also turn to the United States, according to Matt Ammermann, commodity risk manager with INTL FCStone.
(1965) Additional information by Michael Hirtzer and Natalia Zinets; Editing by Nigel Hunt and Dale Hudson
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