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Little change in world wheat production: USDA

by Grain Central, 10 November 2017

WORLD wheat production, forecast at 752 million tonnes (Mt), has changed little from the 2016 output of 754Mt, according to the United States Department of Agriculture (USDA) November report.

However, the countries once considered the big-guns of export are growing less wheat and newcomers are growing more.

World trade in wheat is being shaken up by recent 10-million-tonne-a-year increases in production in Russia.

Russia’s crop lifted to 83Mt in 2017/18, from 73Mt last year and 61Mt in 2015.

The region’s production around Russia and neighbours Ukraine and Kazakhstan, part of the bloc of former Soviet States which USDA defines as FSU-12, has continued to rise; from 118Mt two years ago, to 130Mt last year and 139Mt forecast in 2017/18.

Conversely the 265Mt wheat crop in the five major exporters, US, Argentina, Canada, EU and Australia, will be 25Mt lower than 2016 and 13Mt lower than the 2015 crop.

India is forecast to produce 98Mt of wheat in 2017/18, compared with two previous years’ crops of 87Mt. It helpfully bought a chunk of Australia’s bumper 2016 wheat crop but will import less in 2017/18.

Importers’ trade outlook

When it came to importers, compared with its previous month forecasts, USDA’s November wheat report predicted:

  • India would reduce imports by 500,000t to 3Mt, based on its government raising import duty to 20pc to support domestic price,
  • Vietnam would reduce by 800,000t to 4Mt
  • Iraq would increase by 600,000t to 3.5Mt, and
  • Ethiopia up 200,000t to 1.4Mt, Jordan down 200,000t to 1.1Mt

Exporters’ trade outlook

For exporters, compared to the previous month’s estimates:

  • Australia would reduce exports to 19Mt, down 1Mt from previous month forecast,
  • Russia increase 500,000t to 33Mt, reporting strong early demand, Russian wheat is competitive and state-owned rail cut rates to encourage further additional shipments,
  • US increase 500,000t to 26.5Mt primarily on recent strong sales to Iraq, and
  • Argentina increase 500,000t to 12.5Mt.

One to watch

USDA saw dramatic potential for wheat in sub-Saharan Africa (SSA), that is all countries in Africa other than Algeria, Tunisia, Morocco, Egypt and Libya.

It said local staples cassava, millet and teff were being replaced with wheat in countries such as Nigeria and Ethiopia; that the climate of most SSA countries was too warm for wheat growing; and that rapid changes in population, urbanisation, tastes and incomes were expected to see import demand, up 30pc in six years, continue to expand.

Source: USDA

 

 

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