Changes In The World Wheat Market In The Last 10 Years

Posted by Nogger - a legend in his own mind at 12:50 | Categorized as

17/10/13 -- Comments made the other day by the HGCA's Jack Watts at their Outlook Conference earlier in the week got me thinking. How large of a shift away from US dominance of the global grain markets have we seen over the last ten years? So I thought I'd do a little bit of research, starting with wheat.

World wheat production has risen 28% since 2003/04, with global trade up 39% to 152 MMT. Yet during that time US wheat production is down 13% and US exports are expected to have fallen 6% by the end of the 2013/14 marketing year compared with 10 years previously.

In 2003/04 the US was responsible for 12% of global wheat production. That has now fallen to around 8%. Ten years ago they accounted for 29% of all world wheat exports, and now that is down to 20%.

At this stage you'd probably guess that a lot of the reason for that is production and trade increases from the likes of Russia and Ukraine, and you'd be right. It's also interesting to note though that Europe hasn't stood still during this time.

Europe produced 111 MMT of wheat in 2003/04, 20% of the world's crop. It still produces 20% of the world wheat crop, although now that volume has risen to 143 MMT, a 29% increase on output ten years ago. Part of the reason for that will be down to the fact that there are more members in the club of course - Hungary and Poland joined in May 2004 and Bulgaria and Romania in Jan 2007.

Looking at it from an EU perspective, we've gone from exporting 10 MMT of wheat ten years ago (9% of global trade) to an anticipated 23 MMT this year (and it may well be more) which is 15% of world wheat exports and an increase of 130%.

Russia's crop meanwhile has gone from being 6% of world production to 8%, but exports have risen exponentially. In 2003/04 they only accounted for around 3% of world wheat trade, this year that is expected to be 11% - in volume terms a 467% increase.

For Ukraine I've used the production and export numbers from 2004/05 as the 2003/04 winter wheat crop was slashed by around 75-80% compared with normal due to severe winter damage. Even so their wheat exports are up 150% in the last ten years and they now account for around 7% of the global wheat trade, as opposed to 4% in 2003/04.

Changes In World Wheat Production And Trade 2003/04 vs. 2013/14:

Wheat
Production
Exports
(MMT)
'03/04*
'13/14
Change
'03/04*
'13/14
Change
World
555
709
+28%
109
152
+39%
 
US
64
56
-13%
32
30
-6%
% of World
12%
8%
29%
20%
 
Europe
111
143
+29%
10
23
+130%
% of World
20%
20%
9%
15%
 
Russia
34
54
+59%
3
17
+467%
% of World
6%
8%
3%
11%
 
Ukraine
18
22
+22%
4
10
+150%
% of World
3%
3%
4%
7%
             
*Figures used for Ukraine are for 2004/05