International tension presses US wheat exports

Posted by Marina
The current tension in the Middle East between the United States and Iran is putting pressure on US wheat exports, according to T&F Agroeconomic Consulting. In this scenario, US producers would be concerned about losing market in the Middle East.

“With no continuing Middle East demand, farmers who have struggled with the recent US-China trade war and the difficult climate last year may face new hurdles by 2020. Chicago-traded wheat futures are already have impacted since the air strike, dropping 2.2% to about $ 5.50 a bushel in the last two trading sessions. Prior to the decline, wheat was on the rise, reaching its highest level since the summer of 2019 at $ 5.60 a bushel last week. This price level reflected the optimism that signing a preliminary trade deal this month would unlock demand from China, ”says the firm.

As a result, Middle Eastern countries are expected to import 17.3 million tons of wheat in business year 2019/20, according to the US Department of Agriculture (USDA), which will make them some of the largest importers of the commodity abroad. Southeast Asia and North Africa. By contrast, the US claims only a small portion of exports to the region.

“Of these countries, Iraq and Yemen are among the largest importers of US wheat. This week Iraq - which imported about 470,000 tonnes of US wheat by October 2019 - voted to expel US troops from Iraq in response to the airstrike that killed Soleimani in Baghdad. The vote spurred threats of sanctions by President Trump, ”he concludes.

Source: Agrolink