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World Wheat Market and Turkey

04 November 201511 min reading
Wheat production in the world has increased in 2015/16 season just like in 2013/14 and 2014/15 seasons. The latest forecast reports show an increase in stocks based on production. However the demand is low compared to the former seasons and this influences the amount of traded wheat. As to the latest report of IGC, global wheat trade which reduced to 153 million tons in 2014/15 season will continue to decrease in 2015/16 season and be at the level of 149 million tons. arastr71 Global wheat production continues to increase in the new season as it is in the former two seasons after it decreased a little in 2012/13 season. This increase influenced the reports of leading institutions preparing reports about production, trade and stocks. One of these, International Grain Council (IGC) announced its latest report in 24 September and USDA announced its report in October. Both of the institutions points out a decrease in their forecasts about global wheat trade compared to the former seasons. GLOBAL WHEAT PRODUCTION AND STOCKS According to the former of International Grains Council (IGC), wheat production standing at 679 million tons in the 2009/2010 season receded to 653 million tons by a decrease of 26 million tons in the 2010/2011 season and reached to 695 million tons with an increase of 42 million tons in 2011/12 season. Wheat production in the world decreased to 655 million tons with a record decrease of 40 million tons in 2012/13 season but then reached to 713 million tons in 2013/14 season with a record increase. This increase which relieved the market continued in 2014/15 season, as well and global wheat production reached 720 million tons. In a report dated 27 August, IGC has foreseen no increase for the 2015/16 season in and then showed an increase of 7 million ton in report dated 25 September. According to this wheat production in the world shall be carried out around 727 million tons in 2015/16 season. World wheat production data from the Foreign Agriculture Service US Department of Agriculture (USDA FAS) support the reports of IGC despite a difference of 4-5 million tons. Announcing production amount of 715 million tons for 2013/14 season, USDA announced a production amount of 725 million tons for 2014/15 season. This amount is 5 million tons more than what IGC announced. The same difference continues to show itself in reports for 2015/16 season. Forecasting 731 million ton production for 2015/16 season, USDA increased this amount 733 million tons in September. That increase expectations in production unites with decrease in demands reflected upon stocks as sales in the new season. As to the data of IGC, global wheat stocks which are 188 million tons in 2013/14 and 202 million tons in 2014/15 season will reach 211 million tons in 2015/16 season. Estimates of USDA about stocks are higher than IGC estimates. As to the data of USDA, being around 194 million tons in 2013/14 season, and 212 million tons in 2014/15 season, will reach 228 million tons in 2015/16 season. When USDA data are reviewed among the countries which has the lead in wheat production in the world European Union has the first place in wheat production in the world in with 155.2 million tons of production volume. However a country-based analysis shows that a large part of the world wheat production is met by China, India, Russia and USA in 2013/14 season as always. According to USDA data, out of 732 million tons of world wheat production in the 2015/16 season, 335.7 million tons of wheat is produced in these four countries (China 130 million tons, India 88.9 million tons, Russia 61 million tons, USA 55.8 million tons). These four countries are followed by Australia and Ukraine with 27 million tons, Canada with 26 million tons, Pakistan with 25 million tons and Turkey with 19.5 million tons. When USDA data are reviewed among the countries which has the lead in wheat production in the world wheat production of India has decreased by 6.9 million tons in 2015/16 season when compared to previous season however Canada's production is expected to decrease by approximately 3.4 million tons, Pakistan’s production is expected to decrease 500 thousand tons. On the contrary, China’s production is expected to increase 3.8 million tons, Russia’s production is expected to increase 2 million tons, USA’s production is expected to increase 700 thousand tons and Australia’s production is expected to increase 3 million tons, Ukraine’s production is expected to increase 2 million tons, Turkey’s production is expected to increase 4 million ton. The highest increase among these countries belongs to Turkey. World end-of-season wheat stocks, on the other hand, are estimated to increase by 8 million tons in the 2014/15 season. An analysis of IGC data on end-of-season stocks reveals that the world wheat stock standing at 191 million tons are expected to decrease to 169 million tons in the 2012/13 season and in the 2013/2014 season they are expected to increase and reach 185 million tons. The world end-of-season wheat stocks forecast of IGC for the 2014/15 season is 193 million tons WORLD WHEAT CONSUMPTION IGC figures on general consumption show that the world wheat consumption standing at 698 million tons in the 2011/12 season, decreased to 677 million tons with a record decrease of 21 million tons in 2012/413 season. In 2013/14 the consumption has increased again and reached to 697 million tons. Announcing that consumption amount increased to 707 million tons in 2014/15 season, IGC’s forecasts for 2014/15 indicate another increase. According to the report IGC dated 27 August; wheat consumption in the world shall reach 716 million tons in 2015/16 season and in its latest report, IGC increased its forecast to 719 million tons with an increase of 3 million tons. Forecast of USDA is 3 million less than IGC’s forecast (716 million tons). China, having the largest share in the world wheat production, also has the largest wheat consumption. According to USDA data; China’s wheat consumption in the 2015/16 season will have a decrease of 1.5 million tons and remained at 116.5 million tons. As another important producer, India has a consumption level of 94.5 million tons as opposed to 88.9 million tons of production. Russia, which ranked third with 61 million tons of production in the country-based analysis for the 2015/16 season, uses 37 million tons of its wheat production for domestic consumption. Consumption amount of USA which is forecasted to produce 55.8 million tons of wheat is forecasted to be 33.1 million tons. These four countries, which ranked at the top in consumption as well as in production during the 2015/16 season, are followed by Pakistan with 24,6 million tons, Egypt with 19.6 million tons, Iran and Turkey with 18 million tons, and Ukraine with 12,7 million tons. WHEAT TRADE IN THE WORLD According to the former IGC reports, the quantity of wheat traded worldwide in the 2009/10 season is 128 million tons. World wheat trade volume decreasing to 126 million tons in 2010/11 season reached to 145 million tons in the 2011/12 season with a record increase. In the 2012/13 season, on the other hand, the world wheat trade was realized in parallel with the decrease in production. Estimating that the world wheat trade decreased to 142 million tons by a decrease of 3 million tons in 2012/13 season as compared to the previous season; IGC forecasts that the trade increased 14 million tons in the 2013/14 season and reached 156 million tons. Global wheat trade decreased in 2014/15 season. IGC indicates that this is a decrease of 3 million tons (153 million tons). According to the latest report of IGC; global wheat report which is around 153 million tons in 2014/15 season will continue to decrease and remain at the level of 153 million tons. The data of USDA points out a decrease in trade and the total trade amount is much higher than the data of IGC. As to the data of USDA, wheat trade which is around 162 million tons in 2013/14 season reduced to 161 million tons with a decrease of 1 million tons in 2014/15 season. Similarly, forecasted decrease amount is around 1 million tons again (160 million tons) for 2015/16 season. According to USDA data, out of the 161.3 million tons of what export in the world in 2014/15 season, an important portion of approximately 86.9 million tons carried out by 4 countries. As a country shaping the global wheat trade with 24.8 million ton wheat trade in 2014/15 season, Canada alone carried out 22,1 million tons of the world wheat export in the 2013/14 season. The forecasted export quantity for Canada in 2015/16 season is 19.5 million tons in accordance with the decrease in production. Russia is another major actor in the world wheat and flour trade in 2014/15 season, taking the second place following the Canada, with a wheat and flour export of 22.8 million tons in the 2014/15 season. It has been forecasted that the country shall export 23.5 million tons of wheat in 2015/16 season. Shaping the global wheat trade, USA alone exported 31.5 million tons of total global wheat exports in 2013/14 season. Having a significant decrease in wheat exports, USA has the third place with 22.7 million tons. Forecasted export amount of USA for 2015/16 season is 23 million tons. Ranking fourth following USA in global wheat exports with an export amount of 16.5 million tons in 2014/15 season, Australia exported 18.3 million tons in the previous season. It is forecasted that the country will increase its export amount and reach 18.5 million tons. Based on the global wheat export data of the 2014/15 season, Australia is followed by Ukraine with 11.2 million tons, Kazakhstan with 5.5 million tons. It is forecasted that Ukraine will increase its export amount to 15 million tons and Kazakhstan will increase its export amount to 6.5 million tons. Egypt has the biggest share of the world wheat import like in previous seasons. According to USDA data; Egypt imported 110 million tons of wheat out of 161.1 million tons of world wheat import during the 2014/15 season and forecasts suggest that it will remain at the top in the 2015/16 season, as well, with an import of 11.5 million tons. Indonesia follows Egypt in world wheat import in 2014/15 season. It has been forecasted that Indonesia which has imported 7.4 million tons in 2014/15 season, shall have an import level of 7.8 million tons in 2015/16 as well. In world wheat import Indonesia is being followed by Algeria with 7.2 million tons, Turkey with 5.9 million tons, Japan and Brazil with 5.8 million tons. WHEAT PRODUCTION IN TURKEY When we analyze Turkey’s historical developments in terms of wheat it is seen that the production has increased steadily. Based on the Turkish Statistical Institute (TUIK) data the wheat production which was at 2.5 million tons in 1930’s has increased to 10 million tons in 1967 and 20.6 million tons in 2009 and 21.8 million tons in 2011. Wheat production which decreased a little to 20.1 million tons in 2012, has reached 22 million tons in 2013 with an increase of 2 million tons. However it is known that there is a considerable decrease in the current season due to drought in 2014. According to the data of TUIK, decreasing to 19 million tons in 2014, wheat production started to increase again in the current season 2015/16. In 2015/16 season when harvest season is nearly completed, it is estimated that Turkey’s wheat production will exceed 22 million tons. Based on the TUIK data the rate of wheat production increase between 1930 and 2013 is 780%. Such an increase in production was influenced by the increase in cultivated areas up to a certain point, with soil improvement and proper cultivation techniques becoming more influential at later times. As a matter of fact, the size of wheat cultivation areas was 2.8 acres in 1930, reaching 8 million acres by 1967, which is the same level in 2011. In 2012, cultivation areas decreased nearly 5 million hectares. In the following years, cultivation land area which started to increase again reached 78 million hectares in 2013 and 79 million hectares in 2014. On the other hand, yield per unit, standing at 92 kg/da in 1930, reached 125 kg/da in 1967 increasing by 35.9 % and hit 269 kg/da in 2011 and decreased to 267 kg/da in 2012. Both the reduction in cultivation areas and yield caused the production amount decreased in 2012. Between 1967 and 2012, the increase in cultivation areas was 1% whereas the increase in yield surpassed 100%. For the increase in 2013 when compared to previous season, cultivation areas and yield increase has an important place. There was a considerable increase especially in the yield. The yield which was 267kg/da in 2012 has increased to 284 kg/da in 2013, and 240 kg/decare in 2014.
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