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U.S. Wheat Prices to Fall in 2022, Global Supply to Remain Adequate

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U.S. Wheat Prices to Fall in 2022, Global Supply to Remain Adequate

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.

The average annual wheat price in the U.S. is forecast to drop by 2% y-o-y to $250 per tonne in 2022, falling on reduced domestic consumption coupled with stable supply worldwide. The market balance will be buoyed by production gains in Argentina and the EU that will offset decreasing output in Brazil and Paraguay.

Based on the World Bank’s and USDA data, IndexBox predicts that the average annual price for Hard red winter wheat in the U.S. will drop by 2% y-o-y to $250 per tonne in 2022. Reducing domestic consumption is the key reason for that decrease, as feed use of wheat is expected to fall due to relatively high prices compared to other grains. The EU and Ukraine are to follow the same trend.

The global wheat supply will remain stable in 2022, as boosting production in Argentina and the EU should compensate for the expected decreases in Brazil and Paraguay and lower Russia’s beginning stocks. Argentina’s production is to surpass a record 20.5M tonnes this year.

In 2022, projected global trade will decline to 204M due to reduced supplies from the U.S. and Russia. American wheat remains uncompetitive in foreign markets, while the Russian government imposes quotas on export volumes to ensure sufficient domestic supplies and stabilize domestic food prices. Rising supplies from the EU could only partially offset that drop in the world’s exports.

Global Wheat Exports in 2020

Global wheat exports were estimated at 199M tonnes in 2020, increasing by 13% compared with the previous year’s figure. In value terms, supplies rose markedly to $45.3B.

The shipments of the five major wheat exporters, namely Russia, the U.S., Canada, France and Ukraine, represented more than half of global supplies. Australia (10M tonnes) ranks next in terms of total exports with a 5.2% share, followed by Argentina (5.1%) and Germany (4.7%). The following exporters – Kazakhstan (5.4M tonnes), Poland (4.7M tonnes), Romania (4.3M tonnes), Lithuania (4M tonnes) and Bulgaria (3.2M tonnes) – together made up 11% of the total volume.

In value terms, Russia ($7.9B), the U.S. ($6.3B) and Canada ($6.3B) constituted the countries with the highest levels of exports in 2020, with a combined 45% share of global supplies. These countries were followed by France, Ukraine, Australia, Germany, Argentina, Kazakhstan, Poland, Romania, Lithuania and Bulgaria, which together accounted for a further 44%.

Top Largest Wheat Importers in 2020

The purchases of the twelve significant wheat importers, namely Indonesia, Turkey, Egypt, Nigeria, China, Italy, Algeria, the Philippines, Brazil, Bangladesh, Morocco and Japan, represented more than a third of the total volume. The Netherlands (4.3M tonnes) occupied a minor share of global imports.

In value terms, the largest wheat importing markets worldwide were Egypt ($2.7B), Indonesia ($2.6B) and Turkey ($2.3B), together accounting for 16% of international purchases. These countries were followed by China, Nigeria, Italy, Algeria, the Philippines, Japan, Brazil, Morocco, Bangladesh and the Netherlands, which together accounted for a further 34%.

Source: IndexBox Platform 

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Boosting Shipments to Saudi Arabia and South Africa Push Poland’s Wheat Exports to $1B

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

In 2020, Poland’s wheat exports skyrocketed to $1B, reaching the highest point ever. In physical terms, exports soared from 2.1M tonnes in 2019 to 4.7M tonnes in 2020. The leading importer of wheat from Poland, Saudi Arabia, increased its purchases more than twofold last year. South Africa became the second-largest importer, unprecedently boosting shipments to 773K tonnes. The average export price for wheat from Poland jumped by +7.5% y-o-y to $223 per tonne in 2020.

Poland’s Wheat Exports by Country

Wheat exports from Poland surged 2.1M tonnes in 2019 to 4.7M tonnes in 2020. In value terms, wheat exports surged from $432M to $1B (IndexBox estimates) in 2020. Over the past decade, Poland’s wheat exports rose from 984K tonnes to 4.7M tonnes in physical terms, or from $208M to $1B in value terms.

Saudi Arabia (1.7M tonnes) was the leading destination for wheat exports from Poland, with a 36% share of total exports. Moreover, wheat exports to Saudi Arabia exceeded the volume sent to the second major destination, South Africa (773K tonnes), twofold. Germany (675K tonnes) ranked third in terms of total exports with a 14% share.

Wheat supplies from Poland to Saudi Arabia grew from 0.7M tonnes in 2019 to 1.7M tonnes in 2020. Exports to South Africa rose from 51K tonnes to 773K tonnes over this period. Among other countries, Algeria (from 63K tonnes to 402K tonnes) and Germany (from 503K tonnes to 675K tonnes) also ramped up wheat imports from Poland.

In value terms, Saudi Arabia ($377M) remains the key foreign market for wheat exports from Poland, comprising 36% of total exports. The second position in the ranking was occupied by South Africa ($169M), with a 16% share of total exports, and it was followed by Germany, with a 14% share. In 2020, the average wheat export price amounted to $223 per tonne, rising by +7.5% against the previous year. Average prices varied noticeably for the major export markets.

In 2020, the highest prices were recorded for prices to Kenya ($233 per tonne) and Algeria ($230 per tonne), while the average prices for exports to Turkey ($215 per tonne) and Germany ($217 per tonne) were amongst the lowest. In 2020, the most notable growth rate in terms of prices was recorded for supplies to Tanzania, while the prices for the other significant destinations experienced more modest paces of growth.

 

Source: IndexBox Platform

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Durum’s Share in the European Wheat Imports Spikes

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

Imports of durum wheat in the EU surged by +25% y-o-y to 6.1M tonnes, reaching $1.7B in 2020. Over the last year, the share of durum supplies by volume in the total European wheat imports increased from 15.4% to 19.2%. Italy represents the largest importer of durum wheat in the EU. Belgium emerged as the fastest-growing European importer of durum wheat in 2020. The total imports of all types of wheat estimated at 32M tonnes or $7.4B in value terms.

European Imports of Durum Wheat

In 2020, imports of durum wheat in the EU surged to 6.1M tonnes, with an increase of +25% against the previous year’s figure. In value terms, durum wheat imports soared by +29.0% y-o-y to $1.7B in 2020. Over the last year, the share of the durum wheat supplies (by volume) in the total European wheat imports increased from 15.4% to 19.2%.

Italy represented the major importing country with an import of around 3.2M tonnes, which amounted to 51% of total imports. Belgium (866K tonnes) occupied the second position in the ranking, followed by Spain (498K tonnes) and Germany (372K tonnes). All these countries together occupied approx. 28% share of total imports. Poland (264K tonnes), the Netherlands (263K tonnes), Portugal (145K tonnes), Greece (103K tonnes) and Luxembourg (96K tonnes) followed a long way behind the leaders.

Imports into Italy in volume terms increased by +27.8% in 2020. Belgium (+163.7%), Poland (+105.5%), Portugal (+51.0%), Greece (+7.6%) and Luxembourg (+5.5%) displayed positive paces of growth. Moreover, Belgium emerged as the fastest-growing importer imported in the EUin 2020. By contrast, Germany (-3.7%), Spain (-8.3%) and the Netherlands (-30.5%) illustrated a downward trend over the same period.

In value terms, Italy ($950M) constitutes the largest market for imported durum wheat in the EU, comprising 55% of total imports. The second position in the ranking was occupied by Belgium ($200M), with a 12% share of total imports. It was followed by Spain, with a 7.7% share.

In 2020, the durum wheat import price in the EU amounted to $282 per tonne, increasing by 3.5% against the previous year. Average prices varied somewhat amongst the major importing countries. In 2020, major importing countries recorded the following prices: in Germany ($319 per tonne) and Luxembourg ($304 per tonne), while Poland ($214 per tonne) and Belgium ($230 per tonne) were amongst the lowest. In 2020, the most notable rate of growth in terms of prices was attained by Spain, while the other leaders experienced more modest paces of growth.

Total European Wheat Imports

In 2020, approx. 32M tonnes of wheat were imported in the EU; flattening at the previous year’s figure. In value terms, wheat imports rose by +2.2% y-o-y to $7.4B (IndexBox estimates) in 2020.

In 2020, Italy (8M tonnes), distantly followed by the Netherlands (4.4M tonnes), Spain (4.2M tonnes), Germany (4M tonnes) and Belgium (3.8M tonnes) were the largest importers of wheat, together comprising 77% of total imports. Romania (1.2M tonnes), Portugal (1.2M tonnes), Austria (1.2M tonnes), Greece (0.9M tonnes), Poland (0.9M tonnes) and Latvia (0.7M tonnes) followed a long way behind the leaders.

In value terms, Italy ($2B) constitutes the largest market for imported wheat in the EU, comprising 28% of total imports. The second position in the ranking was occupied by the Netherlands ($962M), with a 13% share of total imports. It was followed by Spain, with a 13% share.

The wheat import price in the EU stood at $233 per tonne in 2020, picking up by +2.9% against the previous year. Average prices varied somewhat amongst the major importing countries. In 2020, major importing countries recorded the following prices: in Italy ($256 per tonne) and Portugal ($243 per tonne), while Poland ($199 per tonne) and Austria ($207 per tonne) were amongst the lowest.

Source: IndexBox Platform

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Global Wheat Production to Reach 758.3M tonnes in 2020

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.

FAO’s updated projections indicate that global wheat production will reach 758.3 million tonnes in 2020, showing a slight decrease of 0.5 percent over the previous year’s highs and still at a fairly high level.

Despite general concerns about the COVID-19 situation, it is not expected to have any significant impact on wheat production this year. Potential yield declines due to unfavorable weather conditions in the EU, Ukraine and the United States will be offset by strong performances in Australia, Canada, Russia, and some Asian countries.

Total wheat production in Europe is projected to decline in 2020, constrained by a fall in harvests in the European Union (EU-27 excluding the UK), where total wheat production is expected to decline to 131 million tonnes. The decrease is due to a reduction in acreage, especially in France, the largest producer in the EU, due to excessive rainfall during the planting season.

In contrast, wheat production in the Russian Federation is projected to rise to 77 million tonnes, despite droughts in March and April, mainly due to an expansion in planted areas as wheat prices rise to record highs.

In Ukraine, wheat production is expected to decline to 25 million tonnes in 2020, which is 3.3 million tonnes less than in 2019, as a result of reduced planted areas and dry conditions in some regions.

In North America, unfavorable weather conditions in the U.S., including low temperatures and scarce rainfall, could affect wheat yields, leading to a decline in production to 50.8 million tonnes in 2020. In Canada, expanded winter plantings are expected to drive production to 34 million tons, assuming that yields and area sown with the spring crop remain unchanged.

In Asia, India’s wheat production in 2020 is projected to a record high of 105 million tonnes, largely due to increased planted areas driven by price increases. In Pakistan, favorable weather conditions will ensure production at 26 million tonnes, while in mainland China, the wheat output is expected to rise slightly.

In the Middle East, the overall outlook is also favorable. In Turkey, the largest producer in the region, wheat production is likely to rise to 20 million tonnes, up 5.3 percent from a year earlier. Results in neighboring countries are expected to remain unchanged from the previous year’s strong harvest.

In North Africa, dry weather in early 2020 will negatively impact harvest in Morocco, where production is projected at a four-year low, and to a lesser extent in Algeria and Tunisia, compared with highs in the previous year.

In the Southern Hemisphere, good crop prospects are expected in Australia, (21.4 million tonnes), Argentina (20.3 million tonnes), and Brazil.

Consumption By Country

The countries with the highest volumes of wheat consumption in 2019 were China (137M tonnes), India (102M tonnes), and Russia (43M tonnes), together accounting for 37% of global consumption. Turkey, the U.S., Pakistan, Egypt, Germany, France, Iran, Italy, and Algeria lagged somewhat behind, together accounting for a further 23%.

From 2009 to 2019, the biggest increases were in Algeria, while wheat consumption for the other global leaders experienced more modest paces of growth.

In value terms, China ($59.9B) led the market, alone. The second position in the ranking was occupied by India ($29B). It was followed by Turkey.

The countries with the highest levels of wheat per capita consumption in 2019 were Algeria (324 kg per person), Turkey (320 kg per person), and Russia (298 kg per person).

World Wheat Production

In 2019, global wheat production 762.2M tonnes, growing by 3.9% compared with the previous year. In general, production showed a relatively flat trend pattern. The growth pace was the most rapid in 2011 with an increase of 6.7% against the previous year. Over the period under review, global production reached the peak volume at 773M tonnes in 2017; however, from 2018 to 2019, production failed to regain the momentum. The generally positive trend in terms output was largely conditioned by a relatively flat trend pattern of the harvested area and a modest increase in yield figures.

Wheat Production By Country

The countries with the highest volumes of wheat production in 2019 were China (134M tonnes), India (102M tonnes), and Russia (75M tonnes), together accounting for 41% of global production. These countries were followed by the U.S., France, Canada, Ukraine, Pakistan, Australia, Turkey, Germany, and Argentina, which together accounted for a further 34%.

From 2009 to 2019, the most notable rate of growth in terms of wheat production, amongst the main producing countries, was attained by Argentina, while wheat production for the other global leaders experienced more modest paces of growth.

World Wheat Harvested Area

In 2019, the total area harvested in terms of wheat production worldwide reached 214M ha, stabilizing at 2018 figures. In general, the harvested area, however, continues to indicate a relatively flat trend pattern. The growth pace was the most rapid in 2011 when the harvested area increased by 2.2% year-to-year. Over the period under review, the harvested area dedicated to wheat production reached the maximum at 225M ha in 2009; however, from 2010 to 2019, the harvested area stood at a somewhat lower figure.

World Wheat Yield

The global average wheat yield reached 3.5 tonnes per ha in 2019, growing by 2.2% on the year before. The yield figure increased at an average annual rate of +1.4% over the period from 2009 to 2019. The most prominent rate of growth was recorded in 2013 when the yield increased by 5.5% against the previous year. The global yield peaked at 3.5 tonnes per ha in 2017; afterward, it flattened through to 2019.

World Wheat Exports

In 2019, global wheat exports expanded to 178M tonnes, with an increase of 3.9% on the previous year’s figure. The total export volume increased at an average annual rate of +2.9% from 2009 to 2019; the trend pattern remained consistent, with only minor fluctuations throughout the analyzed period. The pace of growth appeared the most rapid in 2014 with an increase of 7.7% against the previous year. Over the period under review, global exports hit record highs in 2019 and are expected to retain growth in the immediate term.

In value terms, wheat exports rose slightly to $39.9B (IndexBox estimates) in 2019. Over the period under review, total exports indicated a moderate expansion from 2009 to 2019: its value increased at an average annual rate of +2.9% over the last decade. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2019 figures, exports increased by +12.2% against 2016 indices. The growth pace was the most rapid in 2011 with an increase of 44% y-o-y. Global exports peaked at $49B in 2013; however, from 2014 to 2019, exports remained at a lower figure.

Exports by Country

In 2019, Russia (32.5M tonnes), the U.S. (27M tonnes), Canada (21.5M tonnes), France (20M tonnes), and Ukraine (20M tonnes) were the main exporters of wheat in the world, generating 68% of total export.  Argentina took the next position in the ranking, followed by Australia.

From 2009 to 2019, the most notable rate of growth in terms of shipments, amongst the leading exporting countries, was attained by Ukraine, while exports for the other global leaders experienced more modest paces of growth.

In value terms, the largest wheat supplying countries worldwide were Russia ($6.4B), the U.S. ($6.3B), and Canada ($5.4B), with a combined 45% share of global exports.

Export Prices by Country

In 2019, the average wheat export price amounted to $224 per tonne, flattening at the previous year. Overall, the export price, however, recorded a relatively flat trend pattern. The pace of growth appeared the most rapid in 2011 an increase of 36% year-to-year. As a result, the export price reached a peak level of $315 per tonne. From 2012 to 2019, the growth in terms of the average export prices failed to regain momentum.

Average prices varied somewhat amongst the major exporting countries. In 2019, the countries with the highest prices were Australia ($259 per tonne) and Ukraine ($258 per tonne), while Kazakhstan ($187 per tonne) and Bulgaria ($195 per tonne) were amongst the lowest.

From 2009 to 2019, the most notable rate of growth in terms of prices was attained by Australia, while the other global leaders experienced more modest paces of growth.

Source: IndexBox AI Platform