Qatar’s sole wheat importer Zad Holdings yesterday said it has more than six months’ buffer to mitigate the effect of the globally rising prices in view of Russia’s stoppage of exports.
“We have strategic reserves. We have cover for the next six months. Hence we do not see any threat in the short run,” Zad Holdings CEO Tareq Mohamed said in Doha on the sidelines of a function to discuss its first half results.
Russian Prime Minister Vladimir Putin had banned grain and flour exports from August 15 to December 31 as worst drought on record had devastated crops in parts of that country and as a result, prices of wheat started climbing and had touched a two-year high early this month.
With Russia, the world’s third largest wheat exporter, stopping exports, there has been huge demand for produce from other parts of the world.
However, Qatar, according to Mohamed, was immune since it basically imported wheat from Australia, Canada and Germany as the Russian wheat was extremely soft and was not in conformity with the standards prescribed in Qatar.
Although Russia, which is one of the key wheat producers in the world, stopped exports, he said fundamentally there was no problem as the global market was well supplied and would remain so in view of the new crops in Argentina and Australia.
Australian and Argentine wheat is expected to make big inroads into the Middle East market especially from around December.
“There has been excessive speculation as it (wheat) is traded in the commodities market,” he said, expecting prices to stabilise.
The markets have rather shown signs of stabilisation with prices already started coming down, he said.
The Food and Agriculture Organisation cut its 2010 global wheat production forecast from 676mn tonnes to 651mn tonnes because of the situation in Russia “coupled with anticipated lower outputs in Kazakhstan and Ukraine,” but emphasised that the global supply for wheat is still strong.
Striking a word of caution, Mohamed said if the prices continue to surge; then there could be a hit on the margins especially due to its growing non-subsidy business segments.
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