Japanese disaster adds more uncertainty to wheat exports

Local wheat farmers watched as yet another disaster befell a perennial customer.

Japan, the top world buyer of Washington state wheat, was devastated last week by a 9.0 magnitude earthquake. Toll of the massive quake and tsunami waves, including its impact on nuclear plants, remained unknown four days later.

Randy Suess of Colfax, vice chair of U.S. Wheat Associates—the industry’s international marketer—said the Japan disaster adds yet more uncertainty to the uneasy global wheat export market.

Japan annually buys almost one million metric tons of Washington wheat, almost one-fifth of the nearly five million metric tons of the state’s annual wheat crop.

Another fifth of Washington’s wheat market has been jeopardized by political turmoil in Egypt and Yemen, said Suess.

Suess said the quake and tsunami have impacted the logistics of exporting wheat to Japan. Many low-lying port areas were hit by the tsunami waves.

Overall, Japan is the top importer of Washington-grown food. Last year, Japan purchased $1.3 billion worth of wheat, potatoes, fruit and beef.

The revolution that ousted longtime President Hosni Mubarak in Egypt has thus far had little impact on wheat imports, but Suess said experts are keeping a close eye on the government that might replace Mubarak’s regime.

Egypt last year made a large buy of Washington soft white wheat after Russia shut off its wheat export pipeline.

Political turmoil in Yemen, a perennial customer, may also mean a new regime that could not be as keen on importing Washington wheat, said Suess.

The growing upheaval in global wheat markets, be it natural or political, began to show up in wheat prices, said Trudi Allenbach, marketer for PNW Farmers Cooperative in Colfax.

Prices for soft white wheat have fallen more than half-a-dollar in the past week to $7.15 a bushel, and Allenbach said analysts are predicting a continued fall in the price in the near future.