By: Mehmet Uğur Gürkaynak, Milling and Grain - Türkiye, Eurasia, Middle East Director
The global wheat market is poised for a year of relative stability in production, but with notable shifts in trade dynamics and policy interventions, according to the latest data from the Agricultural Market Information System (AMIS). As we move into the 2024/25 season, the interplay of weather conditions, geopolitical factors, and regulatory changes continues to shape the supply-demand balance for one of the world’s most critical staple crops.
Production Trends: A Mixed Picture
Global wheat production for 2024 is expected to remain close to the previous season’s levels, as highlighted in the AMIS February report. While output is set to increase in key producing countries such as Australia, Kazakhstan, and the United States, these gains are likely to be offset by declines in the European Union (EU) and the Russian Federation. The EU and Russia, two of the world’s largest wheat exporters, are grappling with challenges such as developmental delays in winter wheat due to unfavorable autumn conditions and the risk of winterkill caused by above-average temperatures.
In the EU, winter wheat conditions are generally favorable, though Eastern Europe and the Black Sea region face persistent delays. Similarly, in the Russian Federation, dry sowing conditions in the fall and the threat of winterkill are raising concerns. Ukraine, another major exporter, is contending with long-term dryness in its southern and central regions, further complicating the outlook. Meanwhile, Kazakhstan’s winter wheat remains in dormancy under favorable conditions, and China reports favorable conditions for its winter wheat crop.
In North America, the United States and Canada present a mixed scenario. The U.S. winter wheat crop is in dormancy under generally favorable conditions, while Canada’s Prairies region is under watch due to a reduced snowpack and low temperatures. India, on the other hand, is wrapping up its wheat sowing under favorable conditions, with an increase in the total sown area compared to the previous year.
Trade Dynamics: A Shift in Global Flows
The AMIS report indicates that global wheat trade in 2024/25 (July/June) is expected to decline more than previously anticipated. This revision is largely driven by a month-on-month reduction in China’s imports and lower exports from the EU and the Russian Federation. Tighter supplies, a slower pace of sales, and the imposition of an export quota in Russia are key factors contributing to this trend.
China’s reduced import demand is particularly significant, given its role as one of the world’s largest wheat consumers. The decline in exports from the EU and Russia, two of the top global suppliers, is likely to tighten global wheat availability, putting upward pressure on prices. As a result, global wheat stocks ending in 2025 are projected to contract by 2.9 percent below opening levels, with the largest declines expected in the EU and the Russian Federation.
Policy Developments: Shaping Market Dynamics
Policy changes are playing a critical role in shaping the wheat market landscape. In December 2023, Egypt announced a significant shift in its wheat import responsibilities, transferring authority from the General Authority for Supply Commodities (GASC) to the Mostakbal Misr Agency for Sustainable Development of the Egyptian Air Forces. This move could have implications for Egypt’s wheat procurement strategies and its role in the global market.
India, another major player in the wheat market, has implemented stricter stock limits for traders, wholesalers, retailers, and processors. The new regulations, announced on 11 December, reduce the maximum permitted wheat stock limits by 50 percent for traders and wholesalers and impose similar restrictions on retailers and processors. These measures are aimed at ensuring domestic food security but could limit India’s ability to participate in global wheat trade.
On a more positive note, Türkiye has eased its rules governing wheat imports for flour production. Starting 1 January 2024, buyers are allowed to import 25 percent of their purchases, up from the previous limit of 15 percent. This change is expected to provide some relief to domestic flour producers and could stimulate trade activity.
Kazakhstan’s wheat import ban, initially imposed in April 2023, expired on 1 January 2024. The ban had been extended multiple times, reflecting the country’s efforts to balance domestic supply and demand. Its expiration could open up new trade opportunities in the region.
Finally, India’s decision to authorize the export of 200,000 tonnes of wheat to Nepal marks a significant policy shift. This move, announced on 4 January 2024, comes after India imposed a wheat export ban in May 2022. While the volume is relatively small, it signals a potential easing of India’s restrictive trade policies, which could have broader implications for global wheat markets.
Conclusion: Navigating a Complex Landscape
The global wheat market in 2024/25 is characterized by a delicate balance between production stability and shifting trade dynamics. While favorable conditions in some regions are expected to bolster output, challenges in key exporting countries like the EU, Russia, and Ukraine could tighten global supplies. Policy developments, from stock limits in India to import rule changes in Türkiye, add another layer of complexity to the market outlook.
As highlighted in the AMIS February report, stakeholders in the wheat market must remain vigilant in monitoring these developments. The interplay of weather, trade policies, and geopolitical factors will continue to shape the supply-demand balance, with implications for prices, food security, and global trade flows. In this context, the role of AMIS in providing timely and accurate market information remains indispensable for policymakers, traders, and producers navigating this complex landscape.
Image: AdobeStock
