Global wheat prices are down and increased consumption catered for thanks to strong supplies and increased production in most countries, the United States Department of Agriculture (USDA) said.
Findings and forecasts were published in the USDA’s latest World Agricultural Supply and Demands Estimates (WASDE) report.
The USDA said global wheat supplies for 2013/14 will be up 7.5m tons, with increased production for several of the world’s largest exporters including the US, Canada and EU-28.
US wheat supplies will surge, with exports raised 25m bushels due to strong, early season sales and an increased outlook for China imports, said the USDA.
Canada’s wheat production will rise thanks to favorable soil conditions and a lack of heat stress with Spain, France and Germany showing the biggest gains in Europe.
“Rising world supplies reduce prices and support global consumption growth, thereby limiting the increase in projected 2013/14 global wheat-ending stocks to 0.6m tons,” it said.
Global wheat consumption will be up 6.9m tons with the likes of India and Iran using more for food. But the increase is also driven by higher feed demands from a number of countries including China, the EU, Syria and Morocco.
Room for innovation?
Francisco Redruello previously told BakeryandSnacks.com that the dip in wheat prices would leave room for bakery manufacturers to innovate. “If you spend less money on wheat, you can spend elsewhere,” he said.
Redruello said that given the price drop for wheat, this year would be a good year for industry and one in which manufacturers can invest in marketing, packaging, transport and labeling among other things.
South America wheat woes
While the wheat production and supply is up globally, South America is facing problems, the USDA said.
Crops will not be harvested until late 2013 and production estimates are lower for Argentina due to lower reported seedlings and Brazil because of the late July freeze that has damaged developing wheat. As a result, exports are expected to be lower, the USDA said.
Corn and sorghum down
While wheat production is up, US corn and sorghum production is lowered – a drop that brings down forecasts for global coarse grain supplies by 2.9m tons.
Corn production is also set to be lower in other markets such as Mexico, Russia, Serbia and the EU. Increases in corn production in the Ukraine, India and Turkey will partially offset this dip, the USDA said.