How much will Romanian farmers gain from wheat price boom?

The wheat price increase to around 200 euros/tonne on international markets because of the severe drought sweeping Russia, Ukraine, and Kazakhstan, but mostly this year’s relatively good harvest could see revenues of Romanian wheat growers hit the highest level in five years.

The price of wheat, whose harvest will end this week in Romania, has risen at one of the fastest rates in the last 50 years, by 62% since the beginning of June.

The drought in Russia, a country that produces around 8% of the world’s wheat, has fuelled fears of a worldwide wheat shortage, according to the international press, which discusses the wheat price trend extensively.
Ranking among the world’s top 20 wheat producers, Romania is this year in a position to benefit from the high prices.

At an estimated price of 150 to 200 euros/tonne, at which wheat is sold on the Romanian market and exported, producers could collect between 750 million euros and one billion euros for an overall production of around 5 million tonnes of wheat.

The biggest price recorded for Romanian wheat was reached in 2007, when wheat was sold at 250 euros per tonne, compared with 93 euros/tonne in 2006.

Although the value was high, the volume obtained by local producers amounted to just 3 million tonnes. This year production has almost doubled, and the price keeps going up.

“This is not a high price, it approaches a real price able to cover production costs. This trend will occur quite often from now on, with the price increase having a psychological effect on buyers who will no longer ask to buy wheat at 90 euros/tonne, but will start the offer from 140-150 euros/tonne,” said Ștefan Poienaru, owner of Agrofarm Holding in Fetești, with almost 25 million euros in turnover in the agricultural sector.