Drought-hit Romanian wheat crop should still meet Egypt tenders

BUCHAREST (Reuters) - Romania’s wheat output is expected to fall sharply this year due to a prolonged drought, but the Black Sea exporter should still amass enough of a surplus to offer in Egypt’s international grain tenders, farmers and experts said on Monday.

FILE PHOTO: A stalk of wheat is seen on a field during harvest in Orezu, southeastern Romania, July 2, 2014. REUTERS/Bogdan Cristel

Romania, the second largest grain seller among European Union states, is along with France and Russia a major exporter of cereals to the Middle East, with Egypt the main buyer.

“It’s a double hit. We witness a very bad year for wheat, situation resembles 2002 when plants froze in the winter in the absence of snow cover and then in the spring no rains occurred at all,” Romania’s former agriculture minister Petre Daea said.

Daea told Reuters that field data showed that crops from 10 out of 41 administrative counties were damaged “up to 100%.”

Romania harvested a record wheat crop of about 10 million tonnes last year from 2.1 million hectares, and farmers and traders now expect it to reap about 5 to 7.4 million tonnes.

A smaller crop, against the background of excessive dryness, however, would have a beneficial impact, by preventing the occurrence of the ergot disease in grain - a key requirement in Egypt tenders - experts say.

“Romania is facing a rather severe pedological drought,” Sebastien Devos of the Koepta brokerage in Romania said.

“Romania will remain a wheat exporter, probably with around 3.5 million tonnes, and therefore will be able to participate to international tenders like the Egyptian ones (GASC) depending on the international prices/market and level/demand,” Devos added.

Devos said the south and west are looking good to very good, so it was not so easy to compute an average yield, adding that he expects the 2020 Romanian wheat crop “to be at around 7.3-7.4 million tonnes, maybe even lower”.

Romania’s domestic consumption ranges from 2.5 to 3 million tonnes, leaving an export surplus of 2 to 4.9 million tonnes.

The government, which has yet to release an official estimate, surprised markets last month by temporarily halting wheat exports for a week over fears that global coronavirus lockdowns could lead to a local rush to boost reserves.

Laurentiu Baciu, a farmer in eastern Romania, on the border with Moldova, said 80%-90% of his 650-hectare-fields turned over to wheat were damaged.

“Even if rains will occur, that would be too late and farmers expect overall to harvest about half of last year’s crop,” Baciu said.

Editing by Alexander Smith