Home
FacebookSearchMenu
  • Subscribe
  • Subscribe
  • News
  • Features
  • Knowledge Library
  • Columns
  • Customs
  • Jobs
  • Directory
  • FX Rates
  • Categories
    • Categories
    • Africa
    • Air Freight
    • BEE
    • Border Beat
    • COVID-19
    • Crime
    • Customs
    • Domestic
    • Duty Calls
    • Economy
    • Employment
    • Energy/Fuel
    • Events
    • Freight & Trading Weekly
    • Imports and Exports
    • Infrastructure
    • International
    • Logistics
    • Other
    • People
    • Road/Rail Freight
    • Sea Freight
    • Skills & Training
    • Social Development
    • Sustainability
    • Technology
    • Trade/Investment
    • Webinars
  • Contact us
    • Contact us
    • About Us
    • Advertise
    • Send us news
    • Editorial Guidelines
International

The world has too much wheat

20 May 2020 - by Staff reporter
 Source: Narayan Maharjan, NurPhoto via Getty Images.
0 Comments

Share

  • Facebook
  • Google+
  • LinkedIn
  • E-mail
  • Print

Despite scenes of panic buying at grocery stores and worries about key suppliers’ restrictions on wheat exports in recent months, the world is swimming in the grain.

Although major shippers from Russia to Romania moved to limit exports to protect domestic supplies amid the health crisis -- with some measures still in place -- there hasn’t been a major impact on trade and supplies should keep rising. With large harvests looming in many nations, global wheat stockpiles are expected to hit a record this year and climb even higher in 2021.

While there’s a risk that any adverse weather could change that, immediate concerns about grain shortages on the back of lockdowns proved short-lived. Supply chains have remained intact, export curbs have been loose enough to keep sales flowing, and countries that imposed curbs realized their own supplies were ample. Plus, the pandemic is pummeling global grain demand.

“There hasn’t been a great deal of supply disruption,” said James Bolesworth, director of CRM AgriCommodities in England. “What we saw in the wheat market was very similar to what we saw on the retail level with the likes of loo roll: There was a clear element of panic” before it became apparent that it would be “business as usual,” he said.

Wheat Glut
After prices spiked in late March as consumers hoarded wheat products like flour and nations like Russia, Romania and Kazakhstan moved to curb exports, the market has since largely shrugged off worries about a supply crunch. Benchmark futures have slumped to near the lowest since October.

That’s largely because focus has turned to big crops in key growers from Russia to Canada. Worldwide output should rise 0.5% to a record for the upcoming season, U.S. government data show. That will help inventories climb 5% to 310.1 million tons, equal to about five months’ of global demand.

“It looks like it’s going to be another bumper season” for wheat supply, said Ole Hansen, head of commodity strategy at Saxo Bank A/S. “We shouldn’t be worried.”

Wheat’s also being weighed down as the virus outbreak curbs grain consumption. As well as lost business from restaurants, shuttered ethanol plants have reduced demand for grains to make biofuel, while closed meat plants mean less animal feed is needed. With extra supplies of crops like corn, that’s adding to the pressure on wheat.

Still, with several weeks left before many harvests start, there’s a supply risk that governments have no control over: the weather. For example, recent dryness has threatened yields in the Black Sea area and western Europe, while drought in North Africa will increase the region’s need for imports. In the southern hemisphere, countries like Argentina are only just planting crops.

The U.S. government expects reserves among the world’s top eight shippers to rise just “slightly” from the 2019-20 season, a six-year low.

Any major weather impact on crops could also prompt key suppliers to extend or resume export restrictions, especially if the coronavirus crisis persists. Russia, which has a history of disrupting the wheat market through restrictions or taxes, has said it’ll consider using quotas past the end of this season.

Even so, curbing sales from one region may allow other shippers to fill the gap if there’s enough supply. Despite an expected smaller crop this year, recent rains in the EU’s top wheat shipper France have helped to relieve parched fields, according to lobby group France Export Cereales.

“We always say that June makes the harvest,” said Philippe Heusele, the group’s president. Restrictions elsewhere this year “showed to our clients that our supply is really reliable,” he said. - Bloomberg

Sign up to our mailing list and get daily news headlines and weekly features directly to your inbox free.
Subscribe to receive print copies of Freight News Features to your door.

Deployment of new RTGs at PoCT speeded up

Logistics

A general cargo vessel carrying a second batch of new RTGs is expected imminently.

Today 15:30
0 Comments

ULCV successfully docks at Ngqura, makes history

Logistics
Sea Freight

“This achievement solidifies our status as a significant player in the maritime industry.” – TNPA

Today 15:15
0 Comments

Trump tariffs – July 9 deadline draws nearer

Imports and Exports
Trade/Investment

One of the countries that has already learned its fate in the face of punishing duties is Vietnam.

Today 15:15
0 Comments

Fuel price hikes a strain for consumers

Energy/Fuel

Double-digit price increases and a higher fuel levy will place financial pressure on households.

Today 15:15
0 Comments

Pork for citrus? South Africa faces tough US trade choice

Imports and Exports

If SA’s disease-free status is compromised, PRRS could come at a heavy cost to local pork producers.

Today 15:15
0 Comments

Carrier launches direct flights to London Gatwick

Air Freight

The new route enhances the Kenya-UK Economic Partnership Agreement.

Today 12:30
0 Comments

Creecy reiterates rail cargo volume targets

Logistics
Road/Rail Freight

The intention to re-establish rail as the backbone of transport is fundamental to reforms in SA.

Today 11:45
0 Comments

Resilience required for air sector disruption – executive

Air Freight

Air traffic in the region is expected to rise by an average of 6.4% annually.

Yesterday
0 Comments

Insight of the week: legally ditching higher duties

The actual practice can be traced back to 1882, when an importer in the United States had sugar coated with molasses.

Yesterday
0 Comments

How to avoid the fear of being evaluated

Freight & Trading Weekly
Logistics
Skills & Training

Lifelong learning has become the norm across all economic sectors, both in the UK and globally.

Yesterday
0 Comments

Skills needed to unfreeze African growth potential

Logistics

Growth in demand for cold chain efficiencies is being driven by economic development and rising income.

Yesterday
0 Comments

Iran seeks full control of Russian Caspian Sea terminal

Logistics

The port handles a broad range of goods, including grain, timber, metal products and fertilisers.

Yesterday
0 Comments
  • More

FeatureClick to view

Cold Chain Logistics 4 July 2025

Border Beat

Forum tightens net against border corruption
25 Jun 2025
Police clamp down on cross-border crime
17 Jun 2025
Zim's anti-smuggling measures delay legitimate freight operations
06 Jun 2025
More

Poll

Has South Africa's ports turned the corner?

Featured Jobs

New

Road Logistics Pricing Specialist

Tiger Recruitment
East Rand
02 Jul
New

Operations Manager

Lee Botti & Associates
Cape Town
02 Jul
More Jobs
  • © Now Media
  • Privacy Policy
  • Freight News RSS
  • About Us
  • Advertise
  • Send us news
  • Contact us