North African grain imports are expected to show healthy growth over the next 12 months, boosting prospects for the bulker trades.
Analysts expect a positive impact for long-haul and short-haul business.
Shipbroker Simpson Spence Young (SSY) said North African demand is poised to support short-haul voyages from the Black Sea, France and the Baltic.
“The region is forecast to become the world’s top wheat-importing region in 2020/21 for the first time in three years,” it said in its monthly report to clients.
Although featuring a short-haul component, the shipbroker said the trend growth in North African grain imports continues to “form an important support for vessel demand”.
On the long-haul trades, North Africa’s increasing imports have prompted S&P Global Platts to introduce new supramax freight assessments to reflect the growing trade for grains from South America to the Mediterranean.
They will include one new daily supramax dry bulk grains freight assessment and two new time charter equivalent valuations starting on 2 November.
“The freight assessment and TCEs reflect market rates for an increasingly liquid trade route as trans-Atlantic grains exports from South America comprise a larger proportion of the supramax dry freight sector,” the pricing agency said.
North Africa’s wheat imports in the 2020-2021 season are expected to climb to 29.6m tonnes, making up a 16.1% share of projected global trade, with shipments to Egypt at 13m tonnes and to Algeria at 7m tonnes, according to SSY.
Egypt has raised purchases in the first two months of its buying season by almost 40% compared with the same period last year, with its supply ministry still instructed to keep six months of strategic reserves, in response to Covid-19.
North Africa is forecast to become the world’s top wheat-importing region in 2020/21 for the first time in three years
SSY
Between July and August, Egypt is said to have bought 2.4m tonnes of wheat from international suppliers, compared with 1.72m tonnes during the same period last year.
Its state buyer, the General Authority for Supply Commodities, is reported to have procured more than 500,000 tonnes of Russian wheat in a tender, the most from that country since at least the 2012-2013 season, according to SSY.
Morocco-bound shipments, meanwhile, are forecast to rise to a record 6.2m tonnes from 4.9m tonnes 12 months ago as the country faces a drought-hit domestic crop.
“Moreover, private importers have spearheaded a drive to double wheat stockpiles to six months’ worth of milling needs by October,” SSY said.
Egypt’s corn imports are forecast to rise 500,000 tonnes year on year to a new peak of 11m tonnes in the 2020-2021 season, making up just over half the record high of 21.6m tonnes projected for the whole North African region, according to SSY.
“Algerian and Moroccan corn imports are expected to rise to 5.2m tonnes and 3.5m tonnes respectively, pushing combined North African corn imports in 2020/21 up slightly to 12% of total global corn trade,” it added.
SSY said corn exports from Argentina and Ukraine to the region, excluding Libya, have grown by 23% and 9% year on year to 8.5m tonnes and 4.8m tonnes, respectively, according to the most recent data from the International Grains Council (IGC).
Meanwhile, increased local crush capacity has supported Egyptian soybean import demand, with the country’s soybean imports expected to reach 4m tonnes in the 2020-2021 trade year — the second-highest level on record.
Egyptian imports have predominately focused on US supplies, followed by smaller volumes from South America, according to the US Department of Agriculture.
SSY said corn exports from Argentina and Ukraine to the region, excluding Libya, have grown by 23% and 9% year on year to 8.5m tonnes and 4.8m tonnes, respectively, according to the most recent data from the International Grains Council (IGC).
Meanwhile, increased local crush capacity has supported Egyptian soybean demand, with the country’s imports expected to reach 4m tonnes in the 2020-2021 trade year — the second-highest level on record.
Egyptian imports have focused predominantly on US supplies, followed by smaller volumes from South America, according to the US Department of Agriculture.
“In the first half of 2020, US soybean exports to Egypt climbed to 2.2m tonnes, the highest level seen in the first half of the year of the last 20 years,” SSY said.
In its most recent report, the IGC forecast that North African soybean imports could edge higher in 2020-2021 due to feed and food sector demand.
