As heat wave scorches India, global wheat outlook tightens
The world wheat crop is trending downward, due to a brutal heat wave in India and dry weather in Spain and France, said the Agriculture Department in its monthly WASDE report. Although Russia is expected to sharply increase its exports, more than 12 million tonnes of wheat would be liquidated from global stockpiles over the next year in the face of unrelenting demand for food.
Extreme heat has damaged India’s wheat crop and dimmed the prospects that it would be a major wheat supplier in the year ahead. “India’s exports are reduced 2 million tonnes to 6.5 million as the government intends to restrict exports to ensure sufficient domestic supplies,” said USDA analysts. A month ago, the USDA forecasted India would reap a bumper crop and export 8.5 million tonnes.
The Russian invasion of Ukraine upended the wheat supply chain and drove up prices. Ordinarily, Russia and Ukraine are two of the world’s largest suppliers. Ukrainian wheat production was forecast to fall by a third this year, and exports of 10 million tonnes would be half of the usual total due to the blockade of its Black Sea ports.
Meanwhile, No. 1 exporter Russia would ship 40 million tonnes of wheat during the 2022/23 marketing year, up 7 million tonnes from last year for its second-highest export tonnage ever. A generally favorable growing season makes a large harvest likely, said the USDA.
The world wheat crop was estimated at 773.4 million tonnes, down nearly 1% from 2021/22. With global consumption forecast at 786 million tonnes, barely below last season, the global inventory would fall by 12 million tonnes, or 4.5%, said the USDA. The carry-over next summer, at the end of the marketing year, would be the smallest in six years.
The U.S. wheat crop was forecast at 1.737 billion bushels or 47.3 million tonnes. The United States would rank fifth among wheat-exporting nations, with its smallest exports in half a century because of record-high domestic wheat prices.