Global Wheat Supply and Demand & 2024 Expectations

According to some estimates, approximately 20% of the world’s total wheat production is used in animal feed. However, this rate is directly linked to the production amount and prices of wheat. Unless there is a record increase in production and prices fall to levels that are affordable for feed producers, it seems difficult for wheat to become a sustainable and viable alternative for animal feed.

Global Wheat Supply and Demand & 2024 ExpectationsBy Derya Yildiz
Wheat is the main grain product used in human nutrition, providing about 20 percent of energy and protein needs. This valuable grain product is also an excellent source of energy for livestock. However, only a certain part of wheat production in the world is used in animal feed. Poor quality damaged wheat that is not suitable for human consumption, and wheat specially grown for feed and waste from wheat processed for food production are among the main raw materials of animal feed. According to estimates, nearly 20 percent of the world’s total wheat production is used in animal feed. It is also stated that this rate reaches 40 percent in industrialized countries. In addition, the production amount of the main grains used for feed and the price situation in the market also affect the use of wheat for feed.

LATEST EXPECTATIONS FOR WHEAT PRODUCTION
In its latest report published on February 15, the International Grain Council (IGC) estimates that world wheat production, which was 780 million tons in the 2021/22 season, was 803 million tons in the 2022/23 season (with 27 million tons increase). In the 2023/24 season, which will close in June, production is forecast to decrease approximately by 5 million tons to 788 million tons.

Likewise, the 8 February report of the US Department of Agriculture’s Foreign Agricultural Service (USDA) supports the expectation of a decrease in wheat production. Estimating 789 million tons for the 2022/23 season, the USDA forecasts 785 million tons for the 2023/24 season. Both amounts announced by the USDA are only 4 million tons lower than the IGC’s estimates.

PROMINENT COUNTRIES IN WHEAT PRODUCTION
China ranks first in world wheat production in the 2022/23 season with 137,7 million tons. It is predicted that this amount is forecasted to decrease to 136.5 million tons in the 2023/24 season. The European Union (EU) follows China with 134.1 million tons in the 2022/23 season. It is estimated that the production in the EU decreased to 134 million tons in the 2023/24 season. India is the third-largest wheat producer in the world with 104 million tons. Production in the country is estimated to increase 110,5 million tons in the current 2023/24 season.

India is followed by Russia with 92 million tons, the USA with 44,8 million tons, Australia with 40,5 million tons, Canada with 34,3 million tons, Pakistan with 26,4 million tons and Ukraine with 21,5 million tons in the ranking of the 2022/23 season. In the 2023/24 projection for these countries, a decrease is foreseen in Russia, Canada, and Australia, and partial production increases (ranging between 1 and 4 million tons) in other countries.

RATIO OF PRODUCTION TO CONSUMPTION
According to the IGC data, world wheat consumption, which was 784 million tons in the 2021/22 season, reached 795 million tons in the 2022/23 season. While the production in the 2021/22 season was not at a level to meet the consumption amount, this situation was reversed thanks to the record production increase in the 2022/23 season. However, the difference between production and consumption continues to hover at very low levels. The projected consumption for the 2023/24 season is 803 million tons. This is 5 million tons above the projected production of 788 million tons.

When we look at the world wheat consumption on a country basis, it is seen that countries such as China, India, the EU, Russia, the USA, and Pakistan rank at the top in consumption as well as in production. According to the USDA estimates, wheat consumption was 148 million tons in China, 108,6 million tons in India, 108 million tons in the EU, 42,2 million tons in Russia, 30,4 million tons in the USA, and 29,2 million tons in Pakistan in the 2022/23 season. It is predicted that these countries will consume similar rates in the 2023/24 season.

In world wheat consumption, Egypt and Iran are among the top 10 countries that are not at the top of the production list but consume the most wheat. It is predicted that Egypt will consume approximately 21 million tons of wheat in the 2023/24 season, while Iran will consume approximately 18 million tons of wheat.

HIGHLIGHTS IN WORLD WHEAT TRADE
According to the IGC report, the world wheat trade, which was 191 million tons in the 2020/21 season, reached 198 million tons in the 2021/22 season. The IGC estimates that the trade reached 208 million tons in the 2022/23 season. In the 2023/24 projection, the amount of wheat subject to world trade is forecast to decline to 200 million tons with a decrease of 8 million tons.

The USDA’s February report, on the other hand, paints a slightly different picture from the IGC report in terms of trade. According to the USDA data, the world wheat trade, which was around 199 million tons in the 2020/21 season, amounted to approximately 205 million tons in the 2021/22 season and 216 million tons in the 2022/23 season. In the 2023/24 projection, the USDA forecasts that the amount of wheat that will be subject to world trade will be around 214 million tons.

The ranking of the leading countries in international wheat trade did not change much compared to previous years. Russia, the EU, Australia, Canada, the USA, Ukraine and Kazakhstan take the lead in exports. Russia, which is estimated to have exported 47,5 million tons in the 2022/23 season, is expected to realize an export of around 51 million tons in the upcoming season. In the same period, it is predicted that the EU will export 36,5 million tons, Australia 23 million tons, Canada 24 million tons, the USA 20 million tons, Ukraine 15 million tons, Kazakhstan 10 million tons.

On the import side, countries such as China, Turkey, EU, Egypt, Indonesia, Algeria, Morocco, Philippines and Japan stand out. The imports of these countries in the 2022/23 season are as follows: China 13.2 million tons, Turkey 12.5 million tons, EU 12.1 million tons, Egypt 11.2 million tons, Indonesia 9.4 million tons, Algeria 8.1 million tons and Morocco 5.7 million tons. These countries are expected to import similar amounts in the coming season as well.

Resources:
• International Grains Council (IGC), Grain Market Report, 15/02/2024, https://www.igc.int/
• United States Department of Agriculture Foreign Agricultural Service (USDA), Oilseeds: World Markets and Trade Report, February 8, 2024, https://www.fas.usda.gov/
• Global Wheat Demand: Feeding the World by Milling and Feeding, Stefan Vogel -Global Strategist – Grains & Oilseeds May 2017, Rabobank, https://research.rabobank.com/far/en/sectors/grains-oilseeds/global_wheat_demand_article_1.html