Amid elevated prices for wheat-based products, global wheat flour trade in 2022/23 is forecast to contract by around 2% year-over-year (y/y), to 13.9m t. Iraq is expected to remain by far the world’s largest importer of the product, with arrivals forecast to increase to 2.6m t, in part linked to tighter envisaged wheat availabilities. Turkey is forecast to maintain its position as the leading exporter of wheat flour in the season ahead, with dispatches pegged at 4.6m t, amid continued demand from Iraq and potentially reduced market presence of the EU.
International Grains Council (IGC)
Amid elevated prices for wheat-based products, global wheat flour trade in 2022/23 is forecast to contract by around 2% y/y, to 13.9m t, some 1.3m below the prior five-year average. The projected annual decline chiefly reflects smaller envisaged purchases by the CIS, South America and sub-Saharan Africa, with deliveries to the latter region seen at the lowest level in twelve years. Reflecting a slower than anticipated start to the July/June season, the International Grains Council (IGC) outlook has been trimmed substantially during the past several months, including downgrades for parts of South America and sub-Saharan Africa.
Iraq is expected to remain by far the world’s largest importer of the product, with arrivals forecast to increase to 2.6m t (2.2m previous year), in part linked to tighter envisaged wheat availabilities. Still, the projected volume is likely to fall short of historical highs amid government’s ongoing efforts to facilitate the development of the local milling sector and reduce dependence on imported flour.
A slight rebound in deliveries to Afghanistan is also envisaged in 2022/23, to 1.8m t (1.7m), traditionally mostly sourced from Kazakhstan. Conversely, imports by sub-Saharan Africa are set to drop by around one-fifth, with local consumers seen switching to alternatives amid potentially elevated prices for wheat-based foods. Imports by South America are also seen dropping y/y against the backdrop of dwindling wheat supplies in Argentina, typically the major supplier of wheat flour to the region.
The latest IGC downward revisions for import forecasts include a cut for China, where full-year arrivals are now placed at a below-average 0.2m t, but still above the prior season’s lowly level of 0.1m. While the downgrade is partly tied to slow purchases to date amid local COVID-19 related measures, the analysis is complicated by the absence of official trade statistics for Russia, typically a key supplier of flour to that country.
Projected purchases by some buyers in sub-Saharan Africa have also been reduced recently, with the largest cut being for Angola. With the bulk of supplies typically sourced from Turkey, the latest available export statistics for the latter indicate a sharp y/y drop in shipments to Angola in July-September 2022.
Turkey is forecast to maintain its position as the leading exporter of wheat flour in the season ahead, with dispatches pegged at 4.6m t (4.1m previous year), amid continued demand from Iraq and potentially reduced market presence of the EU. Nonetheless, the Council’s projection for Turkey is scaled back in recent months on a generally sluggish pace of shipments to date. Turkey’s July-September dispatches of around 1.1m t, mostly destined for Near East Asia, notably Iraq, Syria and Yemen, were 8% lower y/y, primarily because of smaller deliveries to sub-Saharan Africa.
Because of tighter supplies, flour exports by Argentina could be the lowest since 2013/14, at around 0.5m t, with further downgrades possible depending on the ultimate size of the 2022/23 harvest, which has been severely impacted by drought conditions and frosts. In contrast, the full-year export forecast for Russia, currently placed at 0.4m t, holds a significant upside potential. While the official export statistics for the country has been suspended, the recent estimates point to a sharp y/y increase in wheat flour shipments since the start of the calendar year.
Amid a smaller domestic outturn, coupled with high input and energy costs for processing, shipments by the EU are seen modestly lower y/y, at 0.6m t. Following a drop in domestic production and government restrictions on wheat exports in August 2022 amid rising domestic prices, shipments by India are seen retreating to a close-to-average level of 0.5m t (1.1m previous year). However, with the more recent moves to allow exports of flour processed from imported grain in the Special Economic Zone, shipments in the months ahead may exceed current expectations.
* The numbers in the article are based on IGC Grain Market Report 537, 17 November 2022.<