Extreme weather has caused damage to production and quality degradation in some major producing countries——
The global wheat supply and demand situation is tightening
Our reporter Liu Hui
Wheat is the most widely distributed food crop in the world, and more than 40% of the world's population feed on wheat as the staple food.
Since the beginning of this year, frequent extreme weather has been encountered in many regions of the world, leading to damage to the output and quality of some major wheat producing countries, which directly affected the global wheat import and export situation and affected the food security of economically underdeveloped countries and regions.
At the same time, it should also be noted that the overall global wheat output has maintained a steady growth in recent years. In particular, several countries represented by China have increased their wheat output year after year, which has made a huge contribution to global food security.
The supply and demand pattern is gradually tightening
Judging from the current global wheat production situation, affected by extreme weather, it is expected that this year the United States, Canada, Russia and other countries will reduce wheat production, while Ukraine, Australia, and the European Union and other countries (regions) will increase wheat production.
“The increase in wheat production in some countries has offset the decline in global wheat production to a certain extent. Overall, the global wheat supply and demand are basically in a tight balance.” said Shen Hongyuan, director of the Zhengzhou Grain Wholesale Market Research and Forecast Department.
According to the wheat crop outlook report issued by the US Department of Agriculture, since July, the northern and western regions of the United States have continued to suffer from widespread droughts, and hard red spring wheat production is expected to decrease by 42% from the previous year, the lowest level in more than 30 years; Durham in the Northern Plains Wheat production is also expected to be reduced by nearly half compared with the previous year due to persistent drought conditions; the Pacific Northwest is affected by drought, and white wheat production has decreased by 29% year-on-year.
The weather in the Canadian prairies continues to be hot and dry, and the total wheat output is revised down by 7.5 million tons to an estimated 24 million tons.
Russia’s wheat production data is revised down by 12.5 million tons to an estimated 72.5 million tons.
However, Ukraine, Australia and the European Union raised production figures.
Ukrainian wheat production reached 33 million tons due to ideal growth conditions, an increase of 30% year-on-year.
Due to timely rainfall during crop growth in Australia, wheat yield increased by 4.25%, and wheat output is expected to reach 30 million tons.
EU wheat production is raised by 400,000 tons, and is expected to reach 138.6 million tons.
From the perspective of supply and demand, the global supply and demand of wheat have shown a tightening trend this year.
According to a report issued by the U.S. Department of Agriculture in August, this year’s global wheat production was 776.9 million tons. Although it was an increase of 1.07 million tons over the previous year, it was 15.49 million tons lower than last month’s forecast. The year-end inventory data was revised down to 279 million tons, the lowest level in five years. The global wheat supply and demand pattern is gradually tightening.
Prominent regional contradiction between supply and demand
The regional contradiction between global wheat supply and demand is prominent. Wheat production and exports are highly concentrated, but consumption and importing countries are decentralized. This supply and demand pattern is easily affected by factors such as the epidemic, policy changes, and freight prices, leading to a sharp increase in global wheat prices.
In the short term, the tense situation in the global wheat market is caused by the contradiction between supply and demand between regions.
In the past five years, the world's average wheat output was about 775 million tons, but the output was mainly concentrated in 8 countries (regions), including China, the European Union, India, Russia, the United States, Canada, Ukraine, and Australia, accounting for about 76% of the world's total wheat output. .
Among them, the average annual output of wheat in China, the European Union and India exceeded 100 million tons. The average annual output of wheat in Russia, the United States and Canada were 75.787 million tons, 49.939 million tons and 31.051 million tons; the average annual wheat output of Ukraine and Australia were 28.162 million tons. Tons and 23.769 million tons.
Russia, the European Union, the United States, Canada, and Ukraine are also major wheat exporting countries (regions), with an average annual export volume in the past five years accounting for 71% of the global total export volume.
Russia exports an average of 35.962 million tons per year, the EU exports 32.55 million tons, and the United States, Canada, and Ukraine exports 25.948 million tons, 23.284 million tons and 19.32 million tons respectively.
Compared with the high concentration of production and exports, global wheat consumption and imports are decentralized.
According to the average data of the U.S. Department of Agriculture in the past five years, the 10 main wheat importing countries are Egypt, Indonesia, Turkey, Algeria, China, Brazil, the Philippines, Myanmar, Japan, and the European Union. The total import volume accounts for 41% of the global import volume.
Among them, China is the world's largest wheat producer and the world's largest wheat consumer.
The wheat produced in my country is mainly used for domestic consumption. While wheat imports are increasing year by year, they are also exported to Japan, South Korea, Malaysia and other countries in small amounts.
Shen Hongyuan believes that according to the global wheat supply and demand characteristics of "relatively concentrated production and export, and relatively scattered consumption and import" and the distribution of various trading countries, the economic development level of production and exporting countries is basically above the global economic development average. The level of economic development of most consuming and importing countries is relatively backward, especially some African countries, South American countries and countries in Central Asia. Although the absolute import volume is not large, once the global supply fluctuates, it will inevitably affect the society of the relevant countries and regions. Stable.
However, recent news shows that 34 countries around the world have indicated that they will increase their wheat export expectations, which will help ease the current global shortage of wheat supply and demand.
Beware of rising prices affecting ration safety
The current global supply and demand of wheat are tightening, and prices have risen sharply.
The Chicago Board of Trade Wheat Index has climbed to 782.25 points, a record high in nearly eight and a half years.
"The rise in global wheat prices is the result of the superposition of various factors such as extreme weather, epidemics, and global excess liquidity." Shen Hongyuan said.
Shen Hongyuan believes that, in the context of the global inflation environment that has formed and the new crown pneumonia epidemic and variant strains are difficult to eliminate, in the next two to three months, it will be difficult to drag international wheat prices back even if the climate in wheat-producing areas improves and the output is expected to rebound. Year-on-year level.
In the long run, wheat prices will remain high due to the impact of the epidemic, international speculative capital speculation, and global liquidity, which will have a greater impact on the stability and security of the international food supply chain and the independent and controllable food supply of our country. Big impact.
At present, the global wheat production reduction and price increase have not had a significant impact on the fundamentals of my country's wheat supply and demand.
In terms of supply, my country’s wheat output reached 134 million tons this year, and stocks are sufficient. In the first July, the total imported wheat was 6.25 million tons, and the total annual imports are expected to be close to 10 million tons.
In terms of consumption, wheat consumption is expected to be around 138 million tons this year.
The total supply is slightly larger than the total consumption, with an annual balance of about 6 million tons.
Global wheat prices continue to operate at a high level, which will increase the pressure of imported inflation in my country to some extent and increase the cost of food procurement in my country.
In the face of rising global wheat prices, China must firmly stabilize the jobs of more than 1.4 billion people. It must adhere to bottom-line thinking to ensure that grain production capacity does not decrease; make overall plans and comprehensive coordination, and it is necessary to expand import sources, channels and types, but also to be reasonable. Deploy the supply, demand, and transportation of different domestic food varieties; formulate tiered emergency plans to respond to the reasonable demand for food, feeding and deep processing under different conditions; rationally guide market expectations, eliminate speculation and hoarding, especially in extraordinary times to manage finances Markets, to prevent extreme financial incidents; strengthen enforcement and supervision under the existing system, and increase penalties for food-related and agricultural-related violations to form a deterrent effect.