Miller Magazine Issue: 144 December 2021

26 MILLER / december 2021 NEWS Tightening global wheat supplies and high prices from major exporters have made Indian wheat competitive for the first time in several years. Indian wheat exports are forecast to be almost 50 percent higher than last year. Wheat prices have risen sharply over the past several months, reflecting strong consumption growth despite rela- tively flat global production. Production was down sharply from last year among several of the major suppliers, including Can- ada, the United States, Kazakhstan, and Russia. While some- what offset by larger crops in the European Union, Ukraine, and Argentina, strong global demand is a major factor lead- ing to tighter global stocks. Import demand is surging as dry weather in the Middle East spurs additional imports, especially for Iran and Turkey. Tendering from the Middle East and North Africa has been robust especially over the past month despite global wheat prices significantly higher than last year. About one-half of global stocks are held by China and generally have not played a significant role in the global market. But over the past year, high feed demand prompt- ed China to offload some of the multi-year-old govern- ment-held stocks into the domestic market via auctions. Wheat stocks in China declined in 2020/21 for the first time in over a decade. Meanwhile, China's import de- mand for milling-quality wheat soared, propelling it to be- come the second-largest importer. Imports are forecast at high levels again in 2021/22, with China forecast as the fourth-largest importer. The major exporters’ stocks are set to decline in 2021/22, representing tighter supplies available to the global mar- ket. Owing to drought-affected production, U.S. and Can- ada stocks are expected to draw down to the lowest level since 2007/08, despite lower exports from both countries. While Ukraine stocks remain steady, Russian stocks are set to decline with its smaller crop and strong exports to the Middle East. EU and Australia stocks are also expect- ed to decline due to exceptionally high exports. India wheat stocks have moved in the opposite direc- tion to the major exporters and now account for 10 percent of global stocks. Over the past several years, production in India has been rising with increasing domestic procure- ment prices and the government has boosted purchases of wheat for its food security programs. With larger crops and government procurement, India wheat stocks have ballooned well above desired buffer stock levels. Tight- ening global supplies and high prices from major export- ers has made Indian wheat competitive for the first time in several years. Indian wheat export prices averaged an attractive $265/ton in August and have the advantage of lower freight rates to nearby countries. Exports are fore- cast to be almost 50 percent higher than last year and nearly nine times higher than 2 years ago. If realized, its exports would be the highest since 2013/14. Indian wheat exports to hit eight-year high