The 33rd IAOM MEA Conference & Expo, hosted at the Egypt International Exhibition Centre in Cairo, served as a hub for the grain industry. With a diverse range of sessions, the conference provided valuable insights into the latest industry trends.
This year, the Annual IAOM MEA Conference & Expo took place in Cairo, Egypt, from November 12 to 15, 2023. Over 600 delegates from 50 countries and nearly 100 exhibiting companies participated in the event, which provided a platform for networking, idea exchange, technical and educational opportunities, and the exploration of new products and services.
The three-day conference featured sessions on world wheat trade, management, technical/what’s new, grain processing technology & trends. Key highlights of the conference included the presentation of the IAOM MEA 2023 Regional Leader Award to Kamel Belkhiria, President of Rose Blanche Group (Tunisia), and the recognition of Peter Muni, a mill consultant from Kenya, as the IAOM MEA 2023 Miller of the Year.
A noteworthy panel discussion titled ‘Managing risk of not only wheat, but currency and geopolitics’ featured Eduard Zernin, Chairman of Rusgrain Union; Oga Venkat, Manager of Middle East & Africa desk at Cargill International; Pieter Defoor, Marketing Manager of Viterra for MENA, and Ahmed Hammouda, CEO of Astra Group, as panelists. The discussion highlighted the evolving dynamics in the grain market, emphasizing the increasing influence of geopolitical developments.
U.S. WHEAT IN FOCUS
Ian Flagg, Regional Vice President of U.S. Wheat Associates, delivered a presentation offering insights into the recent dynamics of the U.S. wheat market. The presentation covered key factors influencing wheat production, exports, and market competitiveness. In the context of near-record farm prices during planting, there was a significant incentive for farmers to expand planted areas, resulting in the highest planted area in eight years. However, variable growing conditions, particularly in the Hard Red Winter (HRW) and white wheat regions, limited the potential for high yields. Despite this variability, overall wheat production saw an increase, characterized by good quality across all wheat classes. Notably, drought conditions in the Southern Plains constrained the growth in production.
The US wheat export landscape, however, presented challenges with a notable decline in HRW, contributing to an overall reduction in U.S. wheat exports. This decline marked the third consecutive year of drought, leading to a 50-year low in all-wheat exports. The competitiveness of U.S. wheat prices was adversely affected, especially in comparison to other origins, particularly impacting shipments to the Middle East and sub-Saharan Africa destinations, Flagg noted.
BLACK SEA REGION’S WHEAT LANDSCAPE
Indrek Aigro, Head of Grains at Copenhagen Merchants, provided insights into the Black Sea region’s grain market. Here is a summary of the key points:
The turmoil in the Black Sea region persists, but this is no longer surprising for the markets. Its impact on prices is becoming less and less visible.
The Black Sea wheat surplus reached ~75 Mmt, thanks to large carry-in stocks in Russia and recovery in the Romanian and Bulgarian crops.
Russia has harvested the second-largest wheat crop (~91-92 Mmt) and a record corn crop. Without the late-season dryness in the spring areas, the wheat crop could have reached close to 100 Mmt again. A +100 Mmt wheat harvest was too ambitious for two consecutive years, but a ~91 Mmt crop is still the second-largest ever recorded. The lingering effects of last year’s record-breaking harvest are still being felt this year, with export figures potentially reaching an even higher level of 49 -50 Mmt.
The list of countries accepting Russian wheat is extensive, but the majority of shipments still heading to several key destinations. Not only buyers were not shy to keep buying Russian origin, but new markets such as Indonesia have also emerged. The Russian crop has decreased from last year’s record, but abundant carry-in stocks might still allow for a new record in exports.
Despite a lower planted area, favorable weather conditions allowed Ukrainian farmers to maintain a wheat harvest above 20 Mmt. Thanks to surprisingly high yields, the wheat crop exceeded last year’s production. However, carry-in levels were closer to normal, indicating that export potential will be reduced this year.
A new humanitarian corridor is being tested. Vessels are navigating through it, but the risk of disruptions is higher than last year. Ukraine has an exportable surplus of 13-14 Mmt. Overall, the combined grains and oilseed crop is good, highlighting the need for a functioning Black Sea corridor.
Romania avoided repeating last year’s story when a severe summer drought reduced the wheat crop to below 9 MMT. Based on EU Commission data, the country has a record crop of 10.5 MMT.
Similar to Romania, Bulgaria’s crop has recovered from last year’s heat-induced decline but still fell short of the 2021 record.
The Black Sea region remains a significant swing factor in the world wheat market due to uncertainties related to war and logistics. However, these conditions are not new, and the market has already adjusted to them.
Roland Guiragossian, Middle East Manager of Intercéréales, discussed the French wheat market outlook, emphasizing France’s pivotal role in the MENA region and Africa. Guiragossian projected that France is expected to produce over 35 million tonnes of wheat in 2023, with 6.5 million tonnes for export to Africa and the Middle East.
Mariam Al-Hazaa, Business Development Manager at Al-Hazaa Investment Group, delivered a comprehensive presentation on the integrated milling operations of the group. Highlighting diverse ventures, including flour milling, feed milling, pasta and noodles production, plastic manufacturing, and renewable energy, Mariam underscored the symbiotic relationships between these operations, contributing not only to the efficiency of Al-Hazaa’s processes but also fostering sustainability and innovation.