Wheat exports increased 14-fold compared with last years exports. IPN Economic Analysis

Wheat exports from 2005 crops conducted through Moldovan Stock Exchange (BUM) increased 14-fold compared with last years exports. Ludmila Moraru, BUM chairman, announced Info Prim that during the first ten days of July, there were exported 150 k tones of wheat, of which more than 33.6 k tones were food wheat. From the 2004 crops, tvia BUM were exported 9.3 k tones. These results are due to the fact that from the last year crop of more than 1 mln tones, only 40% were consumable wheat. The increase in export does not necessarily mean a breakthrough in the actual export, but is rather explained by the situation created prior to 2004. The year 2003 generated a poor crop, which was one of the least productive years. Exports were almost impossible, as there was needed to stock seeds reserves for producers, as well as catering for essential needs by the state. BUM chairwoman considers that there is a decrease in the current year crop, as the seeded area is relatively small. The negative climacteric conditions was one of the causes. “The autumn was dry, the seeds couldn’t grow, and the winter was cold”, said Moraru mentioning that in RM there were seeded about ha 200 k with wheat, compared with ha 400 k in 2005. According to the exports, unfavorable climacteric conditions were characteristic to the whole black Sea region, which means that poor crops can be expected from the whole region. This can lead to a price increase, especially for consumable wheat. Price range for wheat in RM depends wholly on the crop; in the event of a good crop, where the supply can match the demand, the price will not increase dramatically. Wheat is exported to a wide range of countries, among which are: Libya, Arab Emirates, Romania and Belarus, states the cited source. The final destination point can not always be traced, due to the fact that Moldovan producers can only supply to ports, where enough stocks are accumulated in order to be shipped to other destinations. At present, the average price of Moldavian wheat, exported to Ukrainian and Romanian ports is USD 104 per tone. According to BUM, the average price of neighboring countries is higher due to increased logistic expenses, and is sold at an average price of USD 109 per tone. Regarding the producer’s application for export liberalization, Ludmila Moraru, stated that export transactions through BUM comply with the legal requirements, especially those of the Tax Code, which states that transitions should be carried out in a free market environment, at market prices. The law on free competition, states that all should have free access to products; and this right can be exercised by providing through BUM, which can also offer a better price. Experts say that liberalization of the export market does not mean tax evasion. “Liabilities are still there”, and those who want to evade them, are doing that at their own risk. To note that the Union of Associations of Agricultural Producers “Uniagroprotect”, intends to advocate for a stable price for the wheat acquired for state reserves, at a range of MDL 2-2,1, which is at least MDL 0,5 more compared with the previous year. Alexandru Slusari, vice president of “Uniagroprotect” previously declared for Info-Prim Neo, that the price was established according to tendencies of increase in price of consumable wheat, on local as well as international arena. The tendency of price increase is determined by the situation in Ukraine and Romania, where a short of bread is expected due to massive freeze of areas seeded with autumn wheat. Exports also sustain that the tendency of price increase in the next months is traditionally followed by a drop in prices. According to “Uniagroprotect”, the average price for wheat in Ukraine is USD 125-130 per tone, while in May it has been USD 116 per tone. In Romania, the buying price is USD 120. At present the average price of consumable wheat is MDL 1,5 per kg. In RM, crop collection has started after July 15, with a delay of 10-12 days due to climacteric conditions. There are 31 entities for crop collection in the state, with a stock capacity of 1,116 mln tones. For the current year’s state reserve, it is estimated to be acquired 30 k tones. The price would be established by a designated group, from the Ministry of Agriculture and Food Industry. The seeded wheat area in RM is ha 250 k and the experts expect an average crop of 3 tones per ha.