Bulgarian wheat prices expected to fall in 2014 amid harvest forecast of 4.7 million-4.8 million tonnes, industry official says

, April 7, 2014 () – Rich harvest is expected to drive down the price of wheat produced in Bulgaria in 2014, with wheat supply seen at around 4.5mn tonnes, Sofia Commodity Exchange CEO Vasil Simov said in an interview for broadcaster Bulgaria OnAir. Some analysts forecast Bulgarian wheat production to amount to 4.7-4.8mn tonnes this year, Simov added.

World wheat prices have been rallying since early February and the commodity continued to trade at higher levels throughout March. One of the major reasons for the price spike has been the political instability in Ukraine, which accounts for around 6% of the global wheat supply. Concerns over droughts in some major wheat growing countries and potential freeze damage stemming from subzero temperatures that hit the U.S. in January have also contributed to the higher level of prices, according to some market analysts.

While uneasiness in Ukraine is considered to be a concern, reports from the Ukrainian Agriculture Ministry have shown no indication that grain shipments have been affected so far, U.S. Wheat Associates has said in a report. The organisation, however, points to another factor that could support higher wheat prices this year - the drought in the Black Sea region, part of which is Bulgaria where the soil conditions might be a bit dry after the unusually warm winter.

Last year's good world harvest made food cheaper for Bulgarian consumers. The food component in the country's CPI has dropped by an average of 0.6% y/y for the September 2013 - February 2014 period.

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