February 9, 2018

Indonesia to become world's biggest wheat importer, while Russia biggest exporter

Indonesia is poised to become the world's No. 1 wheat importer in 2017-18 at 12.5 million tonnes, overtaking Egypt, which has traditionally been the top wheat buyer, according to the US Department of Agriculture Foreign Agricultural Service's grain trade report for this month.

It said Indonesia wheat imports have been growing based on food and feed demand, even as its population and incomes are rising and diets are moving toward Western trends of pastries, instant noodles and poultry.

Russia, meanwhile, is forecast to be the world's biggest exporter, challenging US market share in many markets globally. Larger French shipments have also trimmed US market share in Morocco. US shipments to Argentina, which has just harvested another massive crop, have slowed to a trickle following unusually large exports last year.

"Furthermore, the low-price Argentine supplies are challenging US exports to other markets around the world, particularly Sub-Saharan Africa and Southeast Asia", the February report said.

Competition from Canada likewise continues to be strong in East and Southeast Asia, it added.

The US was listed as the world's top wheat exporter in 2016 in value terms, accounting for 14.8% of world's total, while Russia was third, accounting for 11.6%.

The report cited a few bright spots for US wheat this year, however, such as Iraq's purchase of at least 600,000 tonnes of Hard Red Winter wheat. This represented the largest purchase from the US in at least six years. The report pointed out that last year, the US did not export any wheat to Iraq.

"Overall, global supplies of wheat are abundant, and the US share of global trade is falling. However, consumption growth in developing countries around the world is pushing trade to record levels, providing a rising tide for wheat suppliers", the report said.  Rick Alberto