Wheat is the most widely distributed food crop in the world, with more than 40% of the world's population living on wheat as their staple food. Since the beginning of this year, many regions of the world have experienced frequent extreme weather, which has caused some major wheat producing countries to suffer production damage and quality deterioration. This has 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 in recent years, the overall global wheat production has maintained a steady growth trend, and in particular, the wheat production of several countries represented by China has increased year by year, making a great contribution to global food security.
The pattern of supply and demand gradually tightened
From the perspective of the current global wheat production situation, due to the impact of extreme weather, the United States, Canada, Russia and other countries will reduce wheat production this year, while Ukraine, Australia and the European Union and other countries (regions) will increase wheat production. "Declines in global wheat production were partly offset by increases in wheat production in some countries. Overall, global wheat supply and demand is basically a tight balance situation." Zhengzhou grain wholesale market research forecast department minister Shen Hongyuan said.
According to the U.S. Department of Agriculture's wheat crop outlook, hard red spring wheat production is expected to be 42% lower than last year and the lowest in more than 30 years, as drought continues across the northern and western parts of the United States since July. Durham wheat production in the northern Plains is also expected to be down by nearly half from last year because of the continuing drought. The Pacific Northwest was affected by drought, with white wheat production down 29 percent year on year. Canada's prairies continued to experience hot and dry weather, with total wheat production revised down by 7.5 million tons to 24 million tons. Russian wheat production figures were revised down by 12.5 million tonnes to 72.5 million tonnes.
However, Ukraine, Australia and the European Union have revised up production figures. Ukraine's wheat production reached 33 million tons, up 30 percent year on year, thanks to ideal growing conditions. Australia's wheat yield is expected to reach 30 million tons, with a 4.25 percent increase due to timely rainfall during the growing season. Wheat production in the EU was revised up by 400,000 tonnes to 138.6 million tonnes.
From the perspective of supply and demand, global wheat supply and demand this year showed a tight situation. According to the report released by the US Department of Agriculture in August, the global wheat production this year is 776.9 million tons, which is 1.07 million tons more than last year, but 15.49 million tons less than last month's forecast. The annual consumption is expected to be 786.7 million tons, and the annual global ending wheat inventory is revised down to 277 million tons, the lowest level in five years. Global wheat supply and demand pattern gradually tight.
Regional contradictions between supply and demand are prominent
Global wheat production and export are highly concentrated, but consumption and importing countries are dispersed. This pattern of supply and demand is easily affected by the epidemic, policy changes, freight price increases and other factors, leading to a sharp increase in global wheat prices. In the short term, the tension in the global wheat market is due to regional supply and demand conflicts.
In the past five years, the world's average wheat production is about 775 million tons, but the production is mainly concentrated in China, the European Union, India, Russia, the United States, Canada, Ukraine, Australia, eight countries (regions), accounting for about 76% of the world's total wheat production. The average annual wheat production of China, the European Union and India exceeded 100 million tons, and that of Russia, the United States and Canada was 75.87 million tons, 49.99 million tons and 31.51 million tons, respectively. The average annual wheat output of Ukraine and Australia is 28.162 million tons and 23.769 million tons respectively.
Russia, THE European Union, the United States, Canada, Ukraine is still a major wheat exporter (region), the average annual export volume in the past five years accounted for 71% of the global total export volume. Russia exported 35.962 million tons annually, the EU 32.55 million tons, the United States 25.948 million tons, Canada 23.284 million tons and Ukraine 19.32 million tons respectively.
Compared with highly concentrated production and exports, global wheat consumption and imports are decentralized. According to the average data of the United States Department of Agriculture in the past five years, the 10 major wheat importers are Egypt, Indonesia, Turkey, Algeria, China, Brazil, the Philippines, Myanmar, Japan and the European Union, accounting for 41 percent of global imports.
Among them, China is the world's largest wheat producer and the world's largest wheat consumer. China's wheat production is mainly used for domestic consumption, wheat imports increased year by year, but also to Japan, South Korea, Malaysia and other countries a small amount of exports.
Hong-yuan shen thinks, according to global wheat production, consumption and import and export is concentrated relatively scattered "characteristics of the supply and demand, and the distribution of various trading countries, production and exporter's level of economic development in the global economic development basic above average, and most consumer and importer of economic development level is relatively backward, In particular, some African countries, South American countries and central Asian countries, although the absolute import volume is not large, once the global supply fluctuations, is bound to affect the social stability of relevant countries and regions.
However, recent news that 34 countries around the world have said they will raise their wheat export forecasts will help ease the current global wheat supply and demand crunch.
Beware of rising prices affecting food security
At present, global wheat supply and demand are tight, and prices are rising sharply. The Chicago Board of Trade wheat index has climbed to 782.25, its highest level in eight and a half years.
"The rise in global wheat prices is the result of a combination of various factors, including extreme weather, epidemics and excess global liquidity." Shen hongyuan said.
Shen hongyuan believes that in the context of the global inflation environment has taken shape and the COVID-19 epidemic and mutant strains are difficult to eliminate, it will be difficult to drag the international wheat price back to the level of the same period last year in the next two to three months, even if the weather in wheat producing areas improves and the production is expected to recover. In the long run, wheat prices will remain high due to the impact of the epidemic, international speculative capital speculation and the flood of global liquidity, which will have a significant impact on the stability and security of the international food supply chain and China's independent and controllable food supply.
At present, global wheat production reduction and price rise have no significant impact on China's wheat supply and demand fundamentals. On the supply side, China's wheat production reached 134 million tons this year, with sufficient inventory; In the first July, the total import of wheat was 6.25 million tons, and the annual total is expected to be close to 10 million tons. In terms of consumption, wheat consumption is expected to be about 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 remain high, which to some extent will increase the pressure of imported inflation in China and increase the cost of food procurement in China.
In the face of rising global wheat prices, China needs to keep the rice bowls of its 1.4 billion people stable. We need to expand the sources, channels and types of imports, and at the same time properly allocate the supply, demand and transportation of different kinds of grain in China. Develop graded emergency plans to meet the reasonable demand for food, feeding and further processing under different conditions; Reasonable guidance of market expectations, to prevent speculation, hoarding and exploitation, especially in emergency times to manage the financial market to prevent extreme financial events; The enforcement supervision under the existing system will be strengthened, and punishments for violations of laws related to food and agriculture will be increased to form a deterrent effect.
