U.S. Wheat Associates analysis points to big expansion of world wheat trade

Date:02-03-2011

U.S. Wheat Associates reports:

A new analysis of the growth in population and wheat demand in importing countries concludes that world wheat trade should at least double by 2050, even if total world wheat consumption merely keeps pace with the expected 40 percent population growth. Chad Weigand, USW Market Analyst based in Arlington, VA, collected population and consumption data from the United Nations Food and Agricultural Organization and other sources to project wheat demand in importing regions and countries and compared them to projected local wheat production increases. The result was the rather startling conclusion that world wheat trade, which has been static for most of the last two decades, is projected to rise dramatically by 2050.

Alan Tracy, USW President, presented the analysis to the USW Board of Directors in Washington, DC, on Wednesday, Jan. 19. He noted that more wheat is traded than any other grain, accounting for about one third of international grain movement. Further, while world wheat exports come primarily from temperate zone countries with low population growth, the demand for wheat is growing fastest in tropical and subtropical regions where little wheat is grown, especially southern Asia, the Middle East and Africa. As a result, world wheat trade will at least double in the next forty years, bringing a substantial growth in demand for wheat from the world's wheat exporting countries. The United States is the world's largest wheat exporter, followed by the European Union, Canada, Australia, Argentina and the Black Sea exporters of Russia, Ukraine and Kazakhstan.

"There are important implications of this expansion in world wheat trade for importers; for shippers, handlers and suppliers; and for wheat farmers in exporting countries," Tracy reported to the USW Board. "Importers will face more competition for exportable supplies and greater price volatility. That will place a premium on wheat from reliable sources of supply, such as the United States. Higher volumes, especially with soybean export volume also rising dramatically, will strain export facilities and create opportunities for exporters willing to make new investments. Technology companies will see growing demand for improved varieties. Wheat growers in the United States and in other exporting countries will see higher prices, on average, amid strong competition between the major crops to get enough acreage planted each year to meet the growing demand for all the grains. No single wheat exporting country or region can meet this growing demand alone; it means a great opportunity for U.S. wheat farmers."

For a copy of Weigand's analysis or Tracy's presentation to the USW Board of Directors, please see the USW website at www.uswheat.org or contact Steve Mercer, USW Director of Communications, at smercer@uswheat.org.