Miller Magazine Issue: 125 May 2020

76 INTERVIEW MILLER / MAY 2020 from corn throughout the season and demand is expected to be constrained due to the global pandemic. What about the demand side? The demand for wheat has increased in the recent period. How the pandemic will impact the demand for the wheat? Do you think the demand will continue to increase in the long term? Yes, we think that the demand will continue to increase in the long term but it will be affected short term by the pandemic. Global wheat Human/Industrial demand is re- vised down 7 Mt this month in our global balance sheet, in anticipation that the disruption caused by the coronavirus crisis to world demand will continue through the first part of new campaign. We are currently working on the assump- tion that the period of disruption will actually be longer in 2020/21 than in 2019/20, particularly as far as the out- of-home catering and tourism sectors are concerned. How- ever, we currently anticipate a less pronounced impact in July-December 2020 than is expected through the second quarter of 2020, in anticipation of a complete or partial re- laxation of the containment measures and a resumption in the activities of artisanal bakeries. As a result, our forecasts this month see reduced demand for a majority of countries. The largest declines relate to India (-1.4 Mt), EU (-1.8 Mt), Egypt (-0.4 Mt), Turkey (-0.4 Mt), and China (-1.2 Mt). Wheat use in the world’s animal feed sector is also revised down this month (-4 Mt); this stems from both a decline in wheat’s competitiveness for use in industrial feeds, and lower projected industrial feed requirements. In effect, the later have decreased compared with last month because of the coronavirus crisis and its economic repercussions on the purchasing power of consumers, which will reduce meat consumption outside the home – at least during the first part of the new campaign. The main reductions to project- ed feed sector demand since last month relate to Southeast and Northeast Asia, China, India and the EU. Wheat use in animal feeds on the world market is cur- rently forecast to decline compared with 2019/20. In the EU, the year-on-year reduction will stem from reduced sup- ply of wheat for on-farm consumption and wheat’s weak competitiveness for use in industrial feed rations. In Aus- tralia, the decrease would be due to weather conditions re- turning to normal, implying greater availability of grazing land and a reduction in early crop cutting. Decreases are also expected in the USA and Canada, where wheat’s com- petitiveness for industrial feed use is expected to be lower than in 2019/20. Wheat prices have also increased in the face of trade restrictions. Do you think this trend will continue over the summer? No, we do not think so as explained above due to the new harvests coming in. Do you have any concerns that closures, lockdowns, and restrictions of movement would cause a negative effect on grain harvests? Yes, the grain harvest will suffer slightly from the closures, lockdowns and restrictions (see above) but the effect will be limited at the global level given that there are no big worries in big exporting countries. The spread of the coronavirus leads to the stockpiling of staples like flour and pasta. How does the European milling industry handle the increased demand for flour? The measures taken in EU countries to contain and close down food consumption points outside the home are tak- ing a heavy toll on the European milling industry. Surging demand for bagged flour consumed at home and biscuits cannot make up for the fall in demand for bakery products (both artisanal and industrial) and products produced by the agri-food industry. However, given the differing profiles of the outlets through which milled flour is distributed and the varying degrees of social distancing imposed across the various EU Stocks/use ratios by main wheat exporters World demand in 2020/21 (all wheat types combined)