Mt / 000’s
Mt / 000’s
As a commodity, wheat is one of the most diverse and complex markets and supply chains. Grown in over 100 of the world’s 195 countries (USDA / EU Commission data), wheat is being harvested somewhere on any given day all year round (currently wheat harvest in Egypt, Iran, Pakistan, India, China and just started in US). It is also one of the most dynamic commodity markets too. In the mid-1980’s, Russia was one of the world’s largest wheat importers (Great Grain Robbery of 1972 Soviet Union imported 15.59mlnt wheat), evolving in 2017/18 to become the world’s largest wheat exporter shipping a forecasted 38mlnt. Globally, production has been increasing year on year peaking to a record in 2017 of 758.381mlnt (please see chart 2).
Figure 2: World Wheat Production
100000 200000 300000 400000 500000 600000 700000 800000
0 Source: USDA
Whilst the area of land cultivated to growing wheat has increased moderately but also fluctuated in response to global commodity markets, the most significant factor in fuelling wheat production has been the increasing yields in certain regions of the world. Historically, dominant wheat producing nations such as the UK and France, have generally seen a stagnation of yields that have fluctuated annually thanks to weather anomalies. Figure 3 below shows the relative stagnation vs the growth in yields of countries in Eastern EU and of the Black Sea. In particular, growth has accelerated since 2012 and a raft of measure such as investment, politics, education and evolution of markets helping to fuel growth in these regions (please see chart 3).
Figure 3: Evolution of Cereal Yields Mt / Ha 08-17 Average 10
United Kingdom Bulgaria
0 1 2 3 4 5 6 7 8 9
1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Source: USDA/EU Commission France Romania
Russia Moldova
Ukraine 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017
21 | ADMISI - The Ghost In The Machine | May/June 2018
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