According to the official information released by international organization Agricultural Market Information System, AMIS, wheat harvest levels might reach their highest during 2013-2014 season due to increased yield in European as well as Black Sea region. Wheat production is expected to increase to 702 million tons compared to 659 million tons in 2012-2013 season, which was marked by draught. Wheat stock might grow to 173 million tons compared to 164 million tons in the previous season. Global demand is forecasted at 694 million tons due to growing population as well as animal feeding purposes.

AgroInvest comment: Due to raising yields, wheat prices might decrease, leading to lower company profits. Even in case of production volume growth, decreasing prices for wheat will be matched against still growing expenses. Companies have already prepared to this situation either by not paying dividends this year, or by modernizing their facilities and machinery, leading to higher effectiveness and efficiency of production. UkrAgroConsult will continue closely monitoring the situation.

UkrAgroConsult