The global wheat market in 2023 has seen a recovery in supply, following tight global supply and skyrocketing wheat prices in 2022 resulting from the onset of the war in Ukraine. Increased wheat exports from Russia, readjustments of supply chains and domestic interventions in the market have helped wheat prices to see a double-digit decline in 2023. Nevertheless, looming geopolitical tensions on a global level are expected to pose a risk to global wheat supply in the short term.
This report comes in PPT.
Rapid population growth and rising consumer affluence in Asia Pacific will provide key drive for increasing wheat consumption in the region. The rising appetites for meat and baked goods are stimulating animal feed demand, especially in China, who is rapidly growing its pig and swine herds after losses due to African Swine Fever.
While wheat price inflation is expected to soften after the peak in summer 2022, the ongoing conflict in Ukraine has potential to continue providing instability for the commodity market. The hard-hit Ukrainian wheat harvest prospects in 2022, ongoing trade tension and sanctions against Russia are able to cause turbulence over the short-term outlook, coupled with inflating input costs, such as fuel and fertiliser.
Strong global demand and peaking prices are motivating some large producers to export more of the domestic production. For example, as one of the largest global producers, India and Canada are well positioned to increase its trade volumes.
The US and Europe are largely saturated markets when it comes to wheat-based products consumption. The population growth is limited, while current Western consumers are increasingly choosing gluten free alternatives to fill their diets. Overall, North America and Western and Eastern Europe regions are set on either decline or stagnating growth in production of grain mill and bakery products in real value terms.
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