Bulgaria has plans to bolster its grain reserves and buy enough grain from local producers to ensure domestic needs for a year ahead as it weighs in risks from Russia’s invasion of Ukraine and volatility of grain markets, its deputy premier said.
Grain producers in the Black Sea country said the state plans to buy about 1.5 million tons of wheat out of 3 million tons that are still in the country’s silos and might restrict wheat exports until it has carried out the planned purchases.
Traders say Bulgaria, one of European Union wheat exporters is seeing extra export demand as merchants seek to replace grain they planned to ship from Ukraine and Russia, two of the world’s biggest suppliers.
On Friday, Hungary banned all grain exports due to price increases caused by the Russian invasion of Ukraine.
“We need to prepare for the worst-case scenario. We have grains for two years in the country, while the state reserve has wheat stocks for 60 days,” Deputy Prime Minister Assen Vassilev told pubic BNT television late on Friday.
“We have the resources to do that (buy wheat), rather than we export all of it and wonder in September where to buy from, or at what prices,” Vassilev, who is also finance minister, said.
Bulgaria’s National Association of Grain Producers (NAGP) said a working group is being set up with the government to discuss details on the planned state purchases, including their timeline and prices and how they would affect exports.
“We have been told at a meeting on Friday that until the states buy out 1.5 million tons of wheat, export might be restricted,” Radoslav Hristov with the NAGP said.
Extra customs checks by Bulgaria earlier this week were slowing grain vessel loadings, which producers said was an unofficial attempt to halt exports.
Hristov said the government has pledged not to obstruct already sealed grain export deals and to allow loaded ships to depart.