Currently, 90% of crops have been harvested in Lithuania. Beans still remain unharvested on the fields, while in the Western and seaside regions, the wheat harvest has also yet to be completed. In neighbouring Latvia and Estonia, the harvest is also nearing its end, with legumes remaining unharvested there.
Precise numbers on the harvests cultivated by the Baltic States’ farmers will only become clear in October-November, but already today it can be seen that for the region’s farmers, this year will be among the more successful and the predicted harvest will be larger than last season.
“So far, the harvest results are only being predicted, but the forecasts are becoming more optimistic with every day,” Svajūnas Banelis, Head of grain trade at AB Linas Agro, says.
“Seeing the harvests grown in our partners’ farms in the Baltic region, we predict that the Lithuanian grain harvest will reach around 8.7 million tonnes, Latvia’s – around 4.3 million tonnes and Estonia’s – around 2.2 million tonnes,” the expert notes.
This year, a larger grain harvest of all grains is predicted. It is calculated that 1.35 million tonnes more wheat will be harvested, as well as 266 thousand tonnes more rapeseed and 170 thousand tonnes more barley than last season.
The futures right now are more favourable option for farmers
In the wholesale grain market, according to experts, a price standstill is settling in. “We are currently not observing any fundamental events and changes in the international grain markets. On the wheat market Matif, prices are currently protected from negative impacts by predictions of poor wheat harvest in France and reduced compared to last year predictions for the total EU harvest. Wheat purchase price standstill also emerges from the falling harvest forecasts in Ukraine, despite being far more optimistic several weeks ago,” S. Banelis says.
In the Baltic States, international customers, seeing the high yield predictions, are looking to make use of the opportunity and push purchase prices down. “They are succeeding with this and grain wholesalers are currently forced to reduce wholesale grain prices,” S. Banelis notes.
“For farmers who have the capabilities to warehouse their grain, we recommend to keep it. When the harvest purchase peak ends, grain prices should recover a little, but we should not forget the global markets and their trends are still dictated by market leaders Russia and Ukraine“, the AB Linas Agro specialist evaluated the situation.
According to predictions by Coceral analysts in their August report, the combined EU27 and UK grain harvest for 2020 will be lower, reaching 295.5 million tonnes compared to last year’s 311.6 million tonnes. This will particularly be the case due to reduced wheat harvests, which, experts calculate, will reach 129.1 million tonnes this year (as compared to 146.8 million tonnes last season).
The barley market, according to S. Banelis, is currently passive. The harvest predictions for this crop are a little higher – 62.5 million tonnes compared to last year’s results of 62.1 million tonnes.
Rapeseed purchase prices are stabilising on the international markets following the first wave of COVID-19. According to S. Banelis, today, they have reached a sufficiently high level, but the situation in the oil crop market remains tense. “If the second wave of COVID-19 emerges in the world, the economy could slow down once again, and the March scenario could repeat where rapeseed and oil prices had bottomed out,” S. Banelis notes.
What markets is Lithuanian grain headed to?
The main directions of Lithuanian wheat export, according to S. Banelis, currently remain Algeria and Saudi Arabia. “Egypt is currently purchasing slightly cheaper grain from the logistically more convenient Black Sea region. There are concerns that grain from this region could begin flooding into Saudi Arabia and Algeria as well, but these countries have stringent quality requirements, which the Black Sea region, unlike the Baltic States, has yet to achieve,” S. Banelis states.
The directions of Lithuanian barley export also remain Saudi Arabia and Algeria, with these crops being used for animal fodder there. The main export markets for rapeseed remain countries with the largest rapeseed processing factories: Belgium, Germany, the Netherlands, Finland and Great Britain.
Baltic States remain among the EU’s top five exporters
For the largest grain markets such as France and Germany, this season has not been successful, unlike the Baltic States. France, which is also the largest grain producer and exporter, has seen its wheat harvest forecast slashed by 24.9%.
British mills are forced to import high-quality wheat from Germany because it is predicted that the country’s wheat harvest will be 25-30% lower and only reach 10-10.5 million tonnes.
Polish analysts predict that the country’s wheat harvest will increase 4-5% compared to the 2019 harvest and reach 11.8 million tonnes. Analysts at Russia’s Ikar have once more increased the harvest forecast for this country, predicting 82.8 million tonnes.
“According to statistics data, today, despite their poor harvests, France and Romania still remain atop the European exporters’ list. Further down on the list, we find Germany and the Baltic States. I believe that Polish export indicators could also be higher, but while the international trading season is only beginning, we believe that the leading five in the export market shouldn’t be changing,” S. Banelis is convinced.
