- The United States Department of Agriculture revised downward its global wheat production forecast for the 2020/21 season to the 2019/20 level.
- Such estimates were prompted by lower forecasts for Argentina and Brazil, where rainfall deficit and consequently lower yields were observed. Despite this, the world wheat harvest set a new record of 776.5 mln t.
- The world leaders in wheat yields in 2020/21 have not changed from the previous season. The highest indicators are forecast in Germany at 7.53 t/ha, France at 6.8 t/ha, Egypt at 6.4 t/ha, and China at 5.7 t/ha.
Wheat produSource: Google ImagesWheat production leaders, China, India, and Russia, have retained their positions as well. Only their total share decreased from 46% in 2019/20 to 42% in 2020/21.
Ukraine’s wheat harvest is forecast to reach 25.5 mln t, placing it 8th in the world producers’ ranking. Besides, the country’s harvested area decreased by 3% to 6.8 mln ha and the average yield to 3.8 t/ha (4.1 t/ha in 2019/20).
According to the latest USDA forecasts, the total volume of foreign trade in wheat in 2020/21 will amount to 196.31 mln t based on April 2021 market situation. Notably, over the last 10 years (i.e. since 2010/11 MY), this figure has increased by 63.27 mln t, by 48%.
Australia has increased wheat exports by 93% over the past year. India has joined the club of wheat exporters having increased the shipment by 4x in 2020/21 to 2 mln t. Brazil has more than doubled its wheat exports to 0.9 mln t. At the same time, the EU has reduced the export of wheat by almost a third to 27.5 mln t. Ukraine sells not more than 17.5 mln t of wheat to foreign markets in the current MY, 17% down on the previous season.
1. China, Wheat Capital
China remains the world’s leading wheat producer, with the area harvested decreasing and yields increasing for the second consecutive year. The country harvested 134.33 mln t of wheat in 2020/21, slightly short of its 2017/18 record. Almost all of the grain is sold domestically, with 1 mln t of wheat exported.
Wheat is India’s second most important cereal crop. In 2020/21, yields remained at last year’s level, but through the 7% increase in sown area and the heaviest monsoon rains in 25 years, production increased by 4.2 mln t or 4%, a record for the country. As in China, the bulk of wheat is sold domestically and only 1.5 mln t is exported.
Russia’s wheat harvest in 2020/21 was one of the highest ever recorded and exceeded expectations. In addition to a 5% increase in the harvested area, yields also improved, allowing for a 16% higher crop than in the previous year. Russia is one of the leaders in wheat exports with 39 mln t of shipment in 2020/21, 13% up YoY.
It is also worth noting that restrictions on grain exports have been in place in Russia since 15 February. The export tax will be in effect until 1 July 2021: 17.5 mln t of grain (wheat, rye, barley, and corn) may be exported.
4. The USA
Wheat is the principal cereal crop in the United States and it is produced across the country. US farmers increased their winter wheat sown area for the first time in eight years. Producers were spurred on by higher grain prices amid strong demand and bad weather in several producing countries.
At the same time, harvested area decreased slightly (by 2%). Production has been at a low level for the last 3 years. More than half of all wheat produced is exported. In the 2020/21 season, 26.8 mln t have already been shipped.
Exceeding the expectations of traders and experts, Canada’s wheat production in 2020/21 reached its highest level in the last 7 years. At the same time, analysts estimate the durum wheat crop to be the highest in the last 4 years at 6.5 mln t.
More than a third (27 mln t) of the total wheat production is exported.
Australia registered a record increase in wheat production of +117% for the year. Exports increased by 141% to 22 mln tonnes, accounting for 67% of production. At the same time, the largest increase in grain production was in New South Wales: 4.5x to 14.8 mln t vs. 3.3 mln t in 2019/20, which was driven by favorable weather conditions in the region.
France is the largest cereal producer in Europe, with crops harvested throughout the territory. Wheat production declined significantly, by 26%, in 2020/21 due to unfavorable weather conditions. Autumn rains slowed sowing and spring drought reduced soft wheat yields, which was one of the reasons for the 6% reduction in the harvested area.
Compared to other grains and oilseeds, the area sown with wheat in Ukraine has not changed significantly over the past five years and has decreased by only 3%.
Ukraine’s wheat harvest in 2020/21 was influenced by rather unstable weather conditions, which affected not only general indicators (yield and bulk yield) but also quality parameters. Compared to the previous record season, wheat production in Ukraine decreased by 13%. Almost a third of the harvested volume was exported: 17.5 mln t, 17% down YoY.