Spotlight on global wheat market

South African Agricultural Commodities Weekly Wrap
August 10, 2018
Domestic maize market is shifting towards the next season
August 14, 2018

Spotlight on global wheat market

wheat market
  • There is generally a bullish sentiment in the global wheat market due to expected lower wheat supplies. On Friday, the United States Department of Agriculture (USDA) revised its 2018/19 global wheat production estimate down by a percentage point from last month to 730 million tonnes, which is 4 percent lower than the previous season. This, however, is still well above the International Grains Council estimate of 721 million tonnes for the corresponding period.
  • The decline in global wheat production is due to an expected lower harvest in the Black Sea, EU region, China and India. This is largely on the back of hot and drier weather conditions, particularly in the case of the EU and the Black Sea regions, as well as the slight reduction in area planted. In the case of the Black Sea region, this is somewhat a return to normal levels from last season’s record harvest.
  • Subsequent to this, the 2018/19 global wheat stocks estimate was also slashed by a percentage point from last month to 159 million tonnes. This is 5 percent lower than the previous season.
  • With that said, the global wheat demand is expected to remain strong, but the share of global trade occupied by the EU, Russia, and Ukraine could be lower than the previous seasons. The USDA forecasts 2018/19 global wheat imports at 182 million tonnes, largely unchanged from the 2017/18 season.
  • The African continent is expected to be amongst the key wheat importing regions. The International Grains Council forecasts Africa’s 2018/19 wheat imports are estimated at 52 million tonnes, roughly unchanged from the previous season. Egypt, Algeria and Morocco are the largest importers, collectively account for 47 percent of the continent’s wheat imports. In addition, Nigeria, Sudan, Kenya, South Africa and Ethiopia are also amongst the key importer of wheat, collectively accounting for 25 percent of Africa’s wheat imports in the 2018/19 season.

 

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