Global wheat focus: supply decline in major exporting countries, wheat prices rise, India's export prospects are bright

 

Although global wheat production has remained relatively stable, the output of some major exporting countries has fallen sharply from the previous year, including Canada, the United States, Kazakhstan and Russia
.
Although the increase in wheat production in the European Union, Ukraine and Argentina has served as a buffer, strong global wheat import demand has led to a tightening of wheat supply
.

 

One reason for the surge in demand for wheat imports is the dry weather in the Middle East, especially Iran and Turkey
.
In the past month, bidding activities have been intensive in the Middle East and North Africa, although international wheat prices have risen sharply year-on-year
.

 

China's wheat stocks account for nearly half of the global wheat stocks
.
Usually China will not have a significant impact on the global wheat market
.
However, due to strong feed demand in the past year, China has put some national reserve wheat stored for many years into the domestic market through bidding fairs.
In 2020/21, China's wheat stocks have fallen for the first time in ten years
.
At the same time, China's import demand for milling wheat has surged, making it the world's second largest wheat importer
.
China's wheat imports in 2021/22 are expected to remain high, and China is expected to become the world's fourth largest wheat importer
.

 

　　In 2021/22, the inventory of major exporting countries is expected to decline, which means that global supply is tight
.
Due to the impact of drought, wheat stocks in the United States and Canada are expected to fall to their lowest levels since 2007/08, even though these two countries have slowed down their wheat exports
.
Of exports declined
.

 

　　In the Black Sea region, although Ukrainian stocks remain stable, Russian stocks are expected to decline due to reduced wheat production and strong exports to the Middle East
.

 

　　Wheat stocks in the EU and Australia are also expected to decline due to unusually active exports
.

 

　　In India, wheat stocks have shown an upward trend and currently account for 10% of global stocks
.
In the past few years, wheat production in India has been increasing.
As the government raised the minimum wheat purchase price, the quantity of wheat purchased increased, which also led to the increase in wheat stocks in India far exceeding the level required for buffer stocks
.
Given the tight global supply of wheat and high prices in major exporting countries, Indian wheat has become competitive for the first time in many years
.
The average price of Indian wheat exports in August was a very competitive US$265/ton.
At the same time, India has the advantage of low transportation costs in neighboring markets.
Therefore, wheat exports are expected to increase by nearly 50% over the previous year and nearly 9 times the year before.

.
If the forecast becomes a reality, it will set the highest export scale since 2013/14
.