The leading countries in world wheat trade and wheat varieties
08 January 20149 min reading
Each year 120-140 million tons of wheat is subjected to the world wheat market and the most important actors of this market are U.S., Australia, Canada, Argentina, European Union, Russia, Kazakhstan and Ukraine. A great part of the world wheat export is realized by these 8 countries. U.S. ranks first among these countries. Each of these countries becomes prominent with different wheat varieties in the wheat market.
According to the last report of International Grains Council dated as 28th November 2013; 141 million tons of 655 million-ton world wheat production of 2012/13 season was subjected to the world wheat trade. U.S., Australia, Canada, Argentina, European Union, Russia, Kazakhstan and Ukraine as Former Soviet Union (FSU) countries are the major actors of world wheat trade.
According to the June 2013 study titled as World Wheat Industry Outlook to 2013 by Richard D. Taylor and Won W. Koo from North Dakota State University; these eight major wheat exporting countries supply approximately 75% of the wheat traded in the world market. Historically the United States has been the largest exporter, followed by Canada and the EU, however the FSU was the largest exporter in 2008, 2009, and 2011. The United States leads in exports of HRW and SRW wheat; an average of 25.9 million metric tons of all wheat classes was exported annually from 2008 to 2012, of which 11.5 million metric tons were HRW and 6.1 million metric tons were HRS. The United States competes with the EU for market share of SRW wheat. Major U.S. and EU markets for SRW wheat include China, West Asia, and North Africa.
Canada is the leader in exports of hard spring wheat and durum wheat. The United States also exports HRS and durum wheat and competes with Canada. The EU competes with the United States and Canada for market share of durum wheat exports. Major U.S. markets for HRS wheat include Southeast Asia and East Asia, including Japan and South Korea. Major Canadian markets for HRS wheat include China and the East Asian markets. The United States, Canada, and the EU compete intensely for the North African durum markets.
Australia and Argentina compete with the United States in exporting HRW wheat. Major U.S. markets for HRW wheat include China and East Asia. Argentina exports HRW wheat mainly to South America and West Asia. Australia’s major markets are the North African countries, China, and West Asia.
2022 PROJECTION OF WHEAT PRODUCTION
Total world wheat trade is projected to increase by 15.3% from 94.0 million metric tons in 2012 to 108.3 million metric tons in 2022. Production of HRW, HRS, SRW, and white wheat in the United States is predicted to increase for the 2012-2022 period. The largest increase in production occurs for U.S. SRW wheat, followed by HRW wheat. U.S. exports of common wheat are predicted to increase for the 2012-2022 period. The United States is expected to import durum wheat from Canada over the period.
Production of Canadian western red spring wheat (CWRS) and Canadian western amber durum (CWAD) wheat are predicted to increase for the 2012-2022 period. CWRS wheat exports are projected to decrease slightly, while durum wheat exports increase by 6.0%. Common and durum wheat production in the European Union (EU) is predicted to increase by 2.2% and 5.1%, respectively, for the 2012-2022 period. The EU is expected to decrease its common wheat exports but increase its durum wheat exports.
Australia’s wheat production is predicted to grow by 10.9% over the 2012-2022 period. Wheat exports are expected to increase from 19.8 million metric tons in 2010-2012 to 21.5 million metric tons in 2022.
Argentine wheat production is projected to increase by 11.5% to about 16.2 million metric tons in 2022. Wheat exports are expected to increase from 5.0 million metric tons in 2012 to 9.4 million metric tons in 2022.
The FSU, China, and India were importers of wheat but have exported wheat during the past 10 years. Wheat production in India has increased 120% since the 1980s. Most of the increase has been due to increases in yields. China’s wheat production reached a recent record level in 2012 at 121 million metric tons. Production in the FSU remained below the 1980s until 2001 and 2002, when production increased 15% and 25%, respectively. Its production fell in 2003 before recovering in 2004. In 2010 the FSU wheat crop fell by 29% from the 2009 level, however in 2011 record wheat production in the FSU allowed for exports of 28.4 million metric tons. In 2012, the FSU had another small wheat crop which limited exports to 17.6 million metric tons.
Most importing countries are predicted to increase their imports for both common and durum wheat. Among those countries, import demand for common wheat in Morocco, Mexico, and Tunisia would grow faster than in other countries. Import demand for durum wheat in Algeria and Venezuela also are expected to be strong for the period. Asian imports, except for China, are expected to remain the same, although per capita consumption is falling.
WORLD WHEAT INDUSTRY
World wheat trade is dominated by a few exporting countries: United States, Canada, Australia, EU, FSU, and Argentina. Even though exporting countries compete with each other, the world wheat market is not perfectly competitive. In the past, some countries have used state trading agencies to market their grain, and many countries maintain trade agreements with importers. Today, private organizations in many countries mediate world wheat trade.
Wheat varieties are highly differentiated in terms of their agronomic and end-use attributes. Based on criteria such as kernel hardness, color, growth habitat, and protein content, wheat is divided into several classes. Color and hardness refer to physical properties of the wheat kernel. Based on the color of the outer layer of the kernel, common wheat varieties are described as white, amber, red, or dark, while the hardness of the kernel is used to characterize them as hard or soft. Most wheat varieties grown today belong to the broad category of common or bread wheat, which accounts for approximately 95% of world wheat production. The remaining 5% of world wheat production is durum wheat used to produce pasta and couscous.
Growth habitat is an important agronomic feature of wheat varieties. Winter wheat is planted in late summer or fall and requires a period of cold winter temperatures for heading to occur. After using fall moisture for germination, the plants remain in a vegetative phase or dormancy during the winter and resume growth in early spring. In contrast to winter wheat, spring wheat changes from vegetative growth to reproductive growth without exposure to cold temperatures. In temperate climates, spring wheat is sown in spring. Since yields tend to be higher for winter wheat than for spring wheat, spring wheat is produced primarily in regions where winter wheat production is infeasible, where frozen soil kills the wheat plants, or where winters are too warm. Countries with mild winters, such as Argentina and Brazil, produce spring wheat but plant in the fall rather than in the spring.
Because of differences in soil types and climates, wheat produced in one country generally differs from that produced in other countries in terms of quality. The United States produces hard, soft, and durum wheat. Hard wheat produced in the United States is further divided into hard red winter (HRW) and hard red spring (HRS) wheat, and soft wheat is divided into soft red winter (SRW) and white wheat. SRW wheat is produced in the Corn Belt and Southern states. HRS and durum wheat are grown in the Northern Plains, mainly North Dakota, which produces about 80% of durum wheat and 50% of HRS wheat produced in the United States. HRW wheat is grown primarily in the Central Plains, mainly Kansas and Oklahoma. White wheat, a type of soft wheat, is grown in the Pacific Northwest, Michigan, and New York. Average U.S. wheat production for the 2008-2012 period was 60.9 million tons, with 25.8 million tons of HRW, 13.8 million tons of HRS, 11.6 million tons of SRW, 7.3 million tons of white wheat, and 2.4 million tons of durum wheat.
The majority of Canadian wheat is produced in Saskatchewan, southwestern Manitoba, and southeastern Alberta. Canada primarily produces a hard red spring wheat (Canadian Western Red Spring (CWRS)) and durum wheat. Average Canadian wheat production for the 2008-2012 period included 21.4 million tons of CWRS and 4.8 million tons of durum wheat.
The EU produced an annual average of 131.3 million tons of soft wheat and 8.7 million tons of durum wheat during the 2008-2012 time period. France accounted for 30% of soft wheat production in the EU in 2012. Germany and the United Kingdom are also major producers. The majority of durum is produced in Italy, Greece, and France. Italy accounted for nearly 58% of EU durum production in 2012, followed by Greece (21%) and France (12%).
Australia primarily produces a winter wheat which is similar to HRW wheat in terms of quality and characteristics. Australian average wheat production amounted to 24.4 million tons for the 2008-2012 period. Wheat production is concentrated in the eastern Australian states of New South Wales and Victoria. However, in 2006 Australia produced just 10.8 million tons of wheat compared to 27.4 million metric tons in 2010 and 29.9 million metric tons in 2011.
Argentina produces wheat with characteristics of both soft and hard wheat. Argentina’s average wheat production amounted to 13.3 million tons for the 2008-2012 period. In 2008, yields fell by one half and in 2009 only 46% of the planted wheat was harvested. Production increased in 2010 and 2011 but only to 75% of a normal crop. In 2012 Argentine wheat production fell about 30% from the 2011 level.
Harvested wheat areas in India and Australia have increased 53% and 52% respectively, since the 1970s. The wheat area for the EU increased by 52%, but the majority of that was due to the addition of countries to the EU. Wheat area in the United States decreased by 16% and increased in Canada by 3%, from the 1970s level. World wheat harvested area decreased about 2%.
Yields increased by 223% in China since the 1970s and by 136% in India. The EU had yield increases of 60%. The U.S. yields increased by 58%, while Canadian yields increased by 59%. The world wheat yield increased by 81% during the five decades.
The total wheat production in 2012 increased by 257% in India and by 183% in China compared to wheat production in the 1970s. The EU production increased by 144%, but a large share of that was due to the addition of countries to the EU. Argentina increased production by 54%. The United States and Canada increased production by 33% and 64%, respectively. Figure 1 shows the changing levels of production using an index where average production over the 1960-1969 time period equals 1.00.
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