Global wheat production is expected to fall from last season’s exceptional level in 2026/27, but total supply will remain historically high, Alexander Karavaytsev, Senior Economist at the International Grains Council, told the International Grain Forum in Novi Sad. He warned, however, that lower import demand in key markets, elevated freight costs and stronger competition among exporters could create early-season pressure for Black Sea, Danube and European suppliers. 

Global wheat markets are likely to enter the 2026/27 season with comfortable supply, but trade flows may become more competitive as major importing regions harvest larger crops and some buyers delay purchases, Alexander Karavaytsev, Senior Economist at the International Grains Council, said at the International Grain Forum in Novi Sad.

Karavaytsev said world wheat output is forecast at around 820 million tonnes in 2026/27, down 24 million tonnes, or 3%, from the previous season’s exceptional level. Despite the decline, the crop would still be the second largest on record, underlining that the market is not facing a shortage scenario.

EXPORTERS FACE SMALLER CROPS, IMPORTERS SEE BETTER OUTPUT

A key feature of the 2026/27 outlook is the divergence between exporters and importers. Production among major wheat exporters is projected to fall by around 42 million tonnes year-on-year. 

Karavaytsev said this shift matters for trade. Lower production in exporting countries may coincide with reduced import demand in some major destination markets, changing the competitive position of suppliers.

North Africa is one of the main regions to watch. Algeria, Morocco, Egypt and Tunisia are all expected to harvest larger crops, and the aggregate North African crop could reach a record if current expectations are realised. Morocco’s output is seen close to a record high, potentially reducing its wheat imports to the lowest level in eight years.

Near East Asia is another important region. Türkiye and Syria are expected to harvest good crops, with both countries benefiting from increased plantings and better yields. In Türkiye, the market is watching for possible import restrictions after a stronger domestic crop outlook.

SUPPLY COULD REACH RECORD LEVEL DESPITE LOWER OUTPUT

Although production is expected to decline, global wheat supply could remain close to last season’s level, or even reach a new record, because of large carry-in stocks from 2025/26.

Demand is also expected to increase and potentially exceed production, which would lead to some tightening in ending stocks. But Karavaytsev said stocks are likely to remain adequate by historical standards.

FOOD USE TO RISE, FEED USE TO FALL

Global wheat food use is expected to increase by around 1%, or 8 million tonnes, in 2026/27, mainly driven by developing countries in Asia and Africa. However, Karavaytsev said food demand will depend partly on relative prices, especially in Asia, where wheat competes with rice in some markets. The IGC price indicators show wheat prices up around 11% year-on-year as at mid-May and maize up around 5%, while rice is down around 6%. This could encourage some consumers in Asia to favour rice where it remains more competitive.

Feed wheat use is expected to decline by around 2%, or 4 million tonnes, after an unusually high level in 2025/26. Large crops and significant availability of feed-quality wheat, especially from Argentina, supported feed use last season. In the new season, wheat is losing competitiveness against maize, with some buyers in Pacific Asia already seen shifting toward maize.

Soymeal is also becoming more relevant in feed markets. Expanding soybean crushing capacity, particularly in the United States, is increasing soymeal output and could further limit feed wheat demand.

GLOBAL WHEAT IMPORTS SEEN DOWN 3%

Global wheat imports are expected to fall by around 3% in 2026/27 after a strong rebound in the previous season. The largest reductions are expected in Pacific Asia, North Africa, parts of the CIS and Europe. In Pacific Asia, import demand may ease because several buyers built sizeable stocks during the current season, including through purchases of competitively priced Argentine wheat, in some cases blended with higher-quality supplies from Canada and the United States.

As wheat and freight prices rise, buyers in countries such as Indonesia, the Philippines and Vietnam may delay purchases and draw down existing inventories. In North Africa, stronger domestic crops are expected to reduce import needs. Lower Moroccan demand would affect both European suppliers, particularly France, and Black Sea origins, including Russia. France has already been displaced by Black Sea origins in Algeria, making Morocco an even more important outlet for French wheat.

TÜRKİYE, MOROCCO AND EGYPT COULD PRESSURE EARLY-SEASON TRADE

Karavaytsev said possible lower demand from Türkiye and Morocco could create early-season pressure for Black Sea and European exporters. Similar to systems used in the past, any import restrictions in Türkiye could take the form of a full ban or a mechanism linking import permissions to domestic purchases. Even without clarity on the final policy, expectations of lower Turkish buying are already a concern for the Black Sea region.

Egypt is another key market to monitor. Karavaytsev said. Egypt is aiming for a record level of domestic wheat procurement from farmers, around 5 million tonnes. If achieved, this could reduce import needs from one of the Black Sea region’s most important destinations.

For Danube suppliers, including Romania, Bulgaria, Serbia and Hungary, this means traditional regional outlets may absorb less wheat than usual. Exporters may have to compete more directly with other Black Sea suppliers in more distant markets.

FREIGHT COSTS RAISE LANDED PRICES

According to IGC data, freight costs have increased by around 44% year-on-year, while FOB wheat prices are up around 11%. Taken together, this implies an increase of around 18% in C&F wheat values, assuming freight accounts for roughly one-fifth of the landed price. This matters directly for import-dependent millers. Higher freight, fuel, insurance and port costs can raise the delivered price even when FOB wheat values are relatively stable.

Exporters also face pressure. To remain competitive on a C&F basis, suppliers may need to absorb part of the freight increase through lower FOB prices. Karavaytsev cited Russia as an example, noting that despite a strong ruble, Russian FOB prices have not risen sharply because exporters need to remain competitive while margins remain under pressure.

CANADA MAY BENEFIT FROM TIGHTER US AND AUSTRALIAN SUPPLY

Karavaytsev said the United States is expected to have the smallest wheat crops in more than 50 years, limiting export capacity. Pacific Asia remains a major destination for U.S. wheat, but reduced U.S. availability could open opportunities for other suppliers.

Australia would normally be well placed to benefit because of its freight advantage into Southeast Asia. However, Australian production is also expected to decline markedly, limiting its ability to capture the full opportunity.

Canada appears better positioned, particularly in high-protein wheat markets. Karavaytsev said Canada could increase shipments significantly and may reach record export levels if competition from the United States and Australia weakens.

Russia, the European Union and Ukraine are also expected to post larger exports, but each faces constraints. Russia’s ability to move large carryover stocks will depend on currency movements, margins and internal logistics, especially because some stocks are far from export ports. EU exporters must find alternative outlets if Morocco buys less and Algeria remains closed to French wheat. Ukraine’s competitiveness will depend heavily on freight costs and access to distant markets such as Southeast Asia.

India is another origin to watch. If global prices rise enough, Indian wheat could become more competitive, first in neighbouring markets such as Nepal and Bangladesh.

Pacific Asia could become one of the key areas of competition. If North African demand weakens, European exporters, especially France, may seek to increase shipments to the region. Black Sea suppliers could target the same markets, but longer-haul sales will depend on freight costs, currency movements and competition from Canada and Australia.