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Global Sorghum Production is Booming Due to Strong Demand in China

sorghum
Archives, Global Trade Daily, News

Global Sorghum Production is Booming Due to Strong Demand in China

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IndexBox has just published a new report: ‘World – Sorghum – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

In 2021, global sorghum production will grow by 5%, boosted by growing supplies to China. Sorghum imports to the country are expected to rise by 28% compared to the previous year, driven by the increasing demand for animal feed. Prices will continue to rise in line with other cereals, following accelerated food inflation. The advantage of sorghum as a more drought-tolerant crop will allow this product to compete seriously with corn and will further stimulate market expansion.

Key Trends and Insights

In 2021, global sorghum production is expected to increase by 5% y-o-y to 61.2M tonnes, thanks to the expansion of cropland and expected favorable weather conditions. The largest crop gains are expected in Argentina (+30% y-o-y), where the crop area increased by 27% y-o-y, as well as in the U.S. (+14% y-o-y) and Mexico (+17%), which expanded sorghum fields by +14% y-o-yand 4% respectively.

Global sorghum exports are expected to grow by 23% y-o-y, primarily driven by China’s continued massive grain purchases for animal feed. According to USDA forecasts, imports to China will increase by 28% y-o-y by the end of 2021 due to the increased demand for animal feed.

In the context of strong demand, prices for sorghum are expected to rise alongside other rising grains. Global food inflation is accelerating due to rising demand for food and animal feed, as well as the increased ethanol and renewable fuel production. In the U.S., a leading producer country that supplies 74% of sorghum to the global export market, the season-average farm price per product increased from $103 per tonne in September 2020 to $155 per tonne in April 2021.

According to forecasts by IndexBox, the sorghum market will continue to grow during the next decade, primarily due to the growing demand for livestock feed worldwide. An increase in demand for gluten-free products in a growing population may be an additional stimulus for market development since sorghum is the main component in such products. Sorghum can compete with corn as an alternative and more drought-resistant crop, which in the context of global climate change is also becoming a stimulus for the development of the sorghum market.

Global Sorghum Production

Global sorghum production stood at 58M tonnes in 2020, therefore, remained relatively stable against 2019. In value terms, sorghum production skyrocketed to $30.5B in 2020 estimated in export prices.

The countries with the highest volumes of sorghum production in 2020 were the U.S. (8.4M tonnes), Nigeria (6.5M tonnes) and Ethiopia (5.6M tonnes), together comprising 35% of global production. From 2012 to 2020, the biggest increases were in Ethiopia, while sorghum production for the other global leaders experienced more modest paces of growth.

Global Sorghum Imports

In 2020, purchases abroad of sorghum increased by 22% to 6.6M tonnes, rising for the second consecutive year after six years of decline. In value terms, sorghum imports skyrocketed to $1.6B (IndexBox estimates) in 2020.

China dominates sorghum import structure, reaching 4.8M tonnes, which was approx. 73% of total imports in 2020. It was distantly followed by Japan (382K tonnes), making up a 5.8% share of total imports. Mexico (232K tonnes) followed a long way behind the leaders.

In value terms, China ($1.2B) constitutes the largest market for imported sorghum worldwide, comprising 71% of global imports. The second position in the ranking was occupied by Japan ($85M), with a 5.2% share of global imports. It was followed by Mexico, with a 4.4% share.

In 2020, the average sorghum import price amounted to $249 per tonne, approximately mirroring the previous year. Prices varied noticeably by the country of destination; the country with the highest price was Mexico ($313 per tonne), while Spain ($205 per tonne) was amongst the lowest.

Source: IndexBox Platform

wheat
Archives, Global Trade Daily, News

Wheat Harvest Is Expected to Increase Globally, But Prices Continue to Rally on Inflationary Expectations

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IndexBox has just published a new report: ‘World – Wheat – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

This year, harvests in the EU, the U.S., the UK, Argentina, Morocco and Ukraine are expected to increase, leading to a growth in wheat production. Even though global stockpiles of grains will remain high, there are boosted expectations for inflation due to forecasts of record demand and increased prices for other cereal grains. The rising global population and bioethanol production are key factors leading to this growth in demand for wheat. Another driving factor is the emerging trend in the EU to use more wheat in animal feed rather than barley.

Key Trends and Insights

In 2021, global wheat production is expected to rise by 13M to 932M tonnes (IndexBox estimates). Overall, crop production is expected to increase due to positive weather conditions in the EU, the U.S., the UK, Pakistan, Brazil, Egypt, China, India and Argentina. This record level of production will help keep global grain stockpiles high. In Russia, Kazakhstan, Australia and Canada, a small drop in crop production is expected. In Canada, this is a result of decreasing acres designated for wheat production and instead allocating the space for canola and barley.

In May 2021, global export prices for corn sharply increased, and wheat followed in suit. This was largely due to fears of poor weather conditions in the Northern Hemisphere. Another impact comes from the inflationary expectations that reflect the expected demand growth. In Canada, the price grew by $48 per tonne, in the US by $56 per tonne and in the EU by $43 per tonne. In Australia, the price also grew by $35 per tonne due to strong exports, while in Argentina, it grew by $27 per tonne. Russian prices grew by $34 per tonne but remained at a competitive level. World Bank expects the average wheat price (Wheat, US, HRW) to surge by 9% in 2021 to $230 per tonne and then to continue growing gradually.

Global demand for wheat in 2021 should reach a record level primarily due to increased demand in South Asia for food products containing wheat. Consumer food preferences in both India and China have shifted toward wheat products and thus driven up demand.

In the next few years, the use of wheat in animal feed is expected to expand, especially in the EU, where a high yield will enable this growth. A similar trend is expected in the U.S. and the UK, driven by growing wheat production. However, in East Asia, the use of wheat in animal feed is predicted to decrease against the rising use of corn.

In the next decade, bioethanol production should additionally cause the market for wheat to grow. Another key factor will be the increased demand for antiseptics arising from the COVID-19 pandemic. This surge in the antiseptic industry is expected to continue driving bioethanol production for at least the next few years.

Wheat Consumption by Country

The global wheat market stood at $295B in 2020, increasing by 3% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price).

China (280M tonnes) constituted the country with the largest volume of wheat consumption, accounting for 31% of total volume. Moreover, wheat consumption in China exceeded the figures recorded by the second-largest consumer, India (105M tonnes), threefold. The third position in this ranking was occupied by Russia (66M tonnes), with a 7.2% share.

From 2012 to 2020, the average annual growth rate of volume in China stood at +1.6%. In the other countries, the average annual rates were as follows: India (+1.4% per year) and Russia (+14.6% per year).

In value terms, China ($123.6B) led the market alone. The second position in the ranking was occupied by India ($27.7B). It was followed by Russia.

The countries with the highest levels of wheat per capita consumption in 2020 were Russia (455 kg per person), France (331 kg per person) and the UK (266 kg per person).

Wheat Imports by Country

In 2020, supplies from abroad of wheat decreased by -8.1% to 167M tonnes, falling for the second consecutive year after three years of growth. In value terms, wheat imports contracted slightly to $39.9B in 2020.

In 2020, Egypt (9.6M tonnes), China (8.2M tonnes), Italy (8M tonnes), Indonesia (7.2M tonnes), Algeria (7M tonnes), Brazil (6.6M tonnes), the Philippines (5.7M tonnes), Japan (5.4M tonnes), Morocco (4.9M tonnes), Nigeria (4.7M tonnes), the Netherlands (4.4M tonnes) and Spain (4.1M tonnes) represented the main importer of wheat in the world, generating 45% of total import. Mexico (4M tonnes) occupied a minor share of total imports.

From 2012 to 2020, the biggest increases were in China, while purchases for the other global leaders experienced more modest paces of growth.

In value terms, the largest wheat importing markets worldwide were Egypt ($2.7B), China ($2.3B) and Italy ($2B), with a combined 18% share of global imports.

China saw the highest rates of growth with regard to the value of imports in terms of the main importing countries over the period under review, while purchases for the other global leaders experienced more modest paces of growth.

Source: IndexBox AI Platform

animal feeding
Archives, Global Trade Daily, Imports/Exports

Animal Feeding Preparations Market in the EU to Continue Measured Growth

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IndexBox has just published a new report: ‘EU – Preparations Used In Animal Feeding – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

The revenue of the market for preparations for animal feeding in the European Union amounted to $64.4B in 2018, stabilizing at the previous year’s level. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). In general, preparations for animal feeding consumption continues to indicate a relatively flat trend pattern. The growth pace was the most rapid in 2011 when the market value increased by 17% against the previous year. Over the period under review, the preparations for animal feeding market attained its peak figure level at $76.4B in 2013; however, from 2014 to 2018, consumption stood at a somewhat lower figure.

Consumption By Country in the EU

The countries with the highest volumes of preparations for animal feeding consumption in 2018 were Spain (25M tonnes), Germany (25M tonnes) and France (22M tonnes), together accounting for 43% of total consumption. The UK, the Netherlands, Italy, Poland and Belgium lagged somewhat behind, together comprising a further 39%.

From 2007 to 2018, the most notable rate of growth in terms of preparations for animal feeding consumption, amongst the main consuming countries, was attained by Poland, while the other leaders experienced more modest paces of growth.

In value terms, France ($10B), Germany ($9.5B) and the UK ($8.2B) were the countries with the highest levels of market value in 2018, together comprising 43% of the total market. Spain, the Netherlands, Italy, Poland and Belgium lagged somewhat behind, together accounting for a further 40%.

The countries with the highest levels of preparations for animal feeding per capita consumption in 2018 were the Netherlands (894 kg per person), Belgium (684 kg per person) and Spain (548 kg per person).

From 2007 to 2018, the most notable rate of growth in terms of preparations for animal feeding per capita consumption, amongst the main consuming countries, was attained by Poland, while the other leaders experienced more modest paces of growth.

Market Forecast 2019-2025 in the EU

Driven by increasing demand for preparations for animal feeding in the European Union, the market is expected to continue an upward consumption trend over the next seven years. Market performance is forecast to retain its current trend pattern, expanding with an anticipated CAGR of +1.0% for the seven-year period from 2018 to 2025, which is projected to bring the market volume to 181M tonnes by the end of 2025.

Production in the EU

The preparations for animal feeding production amounted to 171M tonnes in 2018, remaining relatively unchanged against the previous year. The total output volume increased at an average annual rate of +1.2% over the period from 2007 to 2018; the trend pattern remained consistent, with somewhat noticeable fluctuations in certain years.

Production By Country in the EU

The countries with the highest volumes of preparations for animal feeding production in 2018 were Spain (26M tonnes), Germany (26M tonnes) and France (22M tonnes), with a combined 43% share of total production. These countries were followed by the UK, the Netherlands, Italy, Poland and Belgium, which together accounted for a further 39%.

From 2007 to 2018, the most notable rate of growth in terms of preparations for animal feeding production, amongst the main producing countries, was attained by Poland, while the other leaders experienced more modest paces of growth.

Exports in the EU

In 2018, approx. 16M tonnes of preparations used in animal feeding were exported in the European Union; going down by -2% against the previous year. The total export volume increased at an average annual rate of +3.7% from 2007 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded in certain years. The most prominent rate of growth was recorded in 2010 when exports increased by 20% against the previous year. Over the period under review, preparations for animal feeding exports attained their maximum at 16M tonnes in 2017, and then declined slightly in the following year.

In value terms, preparations for animal feeding exports stood at $18B (IndexBox estimates) in 2018. The total exports indicated a remarkable increase from 2007 to 2018: its value increased at an average annual rate of +3.7% over the last eleven years. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, preparations for animal feeding exports increased by +20.0% against 2015 indices. The pace of growth appeared the most rapid in 2011 when exports increased by 19% against the previous year. Over the period under review, preparations for animal feeding exports attained their peak figure in 2018 and are expected to retain its growth in the near future.

Exports by Country

The Netherlands (3,613K tonnes), Germany (2,709K tonnes), Belgium (1,862K tonnes) and France (1,464K tonnes) represented roughly 60% of total exports of preparations used in animal feeding in 2018. Italy (849K tonnes) held the next position in the ranking, followed by the UK (817K tonnes) and Poland (742K tonnes). All these countries together held near 15% share of total exports. The following exporters – Hungary (703K tonnes), Spain (616K tonnes), the Czech Republic (529K tonnes), Denmark (446K tonnes) and Austria (383K tonnes) – together made up 17% of total exports.

Export Prices by Country

The preparations for animal feeding export price in the European Union stood at $1,128 per tonne in 2018, picking up by 7.1% against the previous year. Over the last eleven years, it increased at an average annual rate of +1.5%.

Prices varied noticeably by the country of origin; the country with the highest price was France ($1,752 per tonne), while the Netherlands ($899 per tonne) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of prices was attained by the Czech Republic, while the other leaders experienced more modest paces of growth.

Imports in the EU

In 2018, approx. 14M tonnes of preparations used in animal feeding were imported in the European Union; remaining stable against the previous year. The total import volume increased at an average annual rate of +3.5% from 2007 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded throughout the analyzed period. Over the period under review, preparations for animal feeding imports reached their maximum in 2018 and are likely to continue its growth in the near future.

In value terms, preparations for animal feeding imports totaled $14.2B (IndexBox estimates) in 2018.

Imports by Country

Germany (2,070K tonnes), the Netherlands (1,925K tonnes), Belgium (1,606K tonnes), France (1,251K tonnes), the UK (1,136K tonnes), Poland (760K tonnes), Italy (623K tonnes), Ireland (456K tonnes), Spain (423K tonnes), Denmark (412K tonnes), Portugal (395K tonnes) and the Czech Republic (358K tonnes) represented roughly 84% of total imports of preparations used in animal feeding in 2018.

From 2007 to 2018, the most notable rate of growth in terms of imports, amongst the main importing countries, was attained by the Czech Republic, while the other leaders experienced more modest paces of growth.

Source: IndexBox AI Platform