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EU could overtake US as the world's second-largest wheat exporter in 2019-20: USDA

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EU could overtake US as the world's second-largest wheat exporter in 2019-20: USDA

New Delhi — The European Union could overtake the US as the world's second-largest wheat exporter in 2019-20, though it is likely to remain far from the top exporter position which it lost three years ago after difficult weather conditions hammered wheat output in its agriculture powerhouse, France, according to the US Department of Agriculture's latest forecasts.

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The EU is forecast to export 27 million mt of wheat in the 2019-20 season (July-June), up 12.5% from 2018-19 and up 15.9% from 2017-18, USDA said in its monthly World Agricultural Supply and Demand Estimates report, released last Friday.

USDA said Russia is set to remain as the world's largest exporter by a large margin, as the country is expected to export 36.0 million mt in 2019-20, down from 37 million mt in 2018-19 due to tighter beginning stocks than in 2018-19, the USDA said.

Russia became the world's largest wheat exporter in 2016-17 by shipping out 27.8 million mt of wheat. That season France saw a poor wheat crop due to heavy rains, hitting a 30-year low production level. As a result, wheat exports out of the EU fell 21.3% from the 2015-16 levels.

The EU became the world's largest wheat exporter in 2014-15 for the first time shipping out 35.4 million mt of wheat, overtaking the US which exported 23 million mt, the country's lowest since 2002-03.

In 2015-16, the EU exported 34.7 million mt of wheat, while the US shipped just 21.8 million mt, hitting a 44-year low, USDA data showed.

The US could slip below Canada to become the world's fourth-largest wheat exporter in 2019-20, according to the USDA. US wheat exports could struggle to reach beyond traditional markets in Latin America and Asia amid higher export volumes from most competitors, the agency added.

Overall, global wheat trade in 2019-20 is expected to jump 3% on year to a record 184 million mt, with Sub-Saharan Africa and Southeast Asia markets driving up the demand, according to the US agency.

--Rohan Somwanshi, rohan.somwanshi@spglobal.com

--Edited by Alisdair Bowles, newsdesk@spglobal.com