How Wheat Exports Boost the Global Economy

Wheat is one of the most important crops in the world, providing food and income for billions of people. Wheat is also a major commodity in the international trade, with many countries exporting and importing large quantities of wheat every year. In this article, we will explore how wheat exports boost the global economy, which countries are the top wheat exporters, and what are the challenges and opportunities for the wheat trade in the future.

Wheat exports and the global economy

Wheat exports have a significant impact on the global economy, as they affect the supply and demand of wheat, the prices of wheat and other grains, the income and food security of wheat producers and consumers, and the trade relations and cooperation among countries. According to the Food and Agriculture Organization (FAO), the global wheat trade reached a record high of 198 million tons in 2020, accounting for about 25% of the world’s wheat production. The value of wheat exports was estimated at $66.2 billion in 2022, up by 61% since 2018.

Wheat exports benefit the global economy in several ways.

First

wheat exports increase the availability and accessibility of wheat in the world market, especially for countries that have a deficit in wheat production or face climatic or political shocks that affect their domestic supply. Wheat imports can help these countries meet their food demand, improve their nutrition, and stabilize their prices. For example, Egypt is the world’s largest wheat importer, importing about 13 million tons of wheat in 2020 to feed its population of over 100 million people.

Second

wheat exports generate income and employment for wheat producers, traders, processors, and exporters, especially in developing countries that rely on agriculture as a main source of livelihood. Wheat exports can also stimulate economic growth, investment, innovation, and diversification in the wheat sector and beyond. For example, Argentina is one of the world’s top wheat exporters, exporting about 10 million tons of wheat in 2020. Wheat exports contribute to about 2% of Argentina’s gross domestic product (GDP) and support about 500,000 jobs along the wheat value chain.

Third

wheat exports enhance trade relations and cooperation among countries, as they foster mutual trust, interdependence, dialogue, and collaboration on various issues related to wheat trade. Wheat exports can also promote regional integration and stability, as well as global peace and security. For example, the European Union (EU) is a major player in the global wheat trade, exporting about 30 million tons of wheat in 2020 to more than 100 countries. The EU’s common agricultural policy (CAP) regulates the production and trade of wheat among its member states and with third countries, ensuring a fair and sustainable market for both producers and consumers.

Top wheat exporters by country

The global wheat trade is dominated by a few countries that have a comparative advantage in wheat production and export. According to FAO statistics for 2020 , the top 15 wheat exporters by country were:

Russia: 37.3 million tons ($7.9 billion)
United States: 26.1 million tons ($6.3 billion)
Canada: 26.1 million tons ($6.3 billion)
France: 19.8 million tons ($4.5 billion)
Ukraine: 18.1 million tons ($3.6 billion)
Australia: 10.4 million tons ($2.7 billion)
Argentina: 10.2 million tons ($2 billion)
Germany: 9.3 million tons ($2.1 billion)
India: 2.1 million tons ($2.1 billion)
Romania: 2.1 million tons ($2.1 billion)
Kazakhstan: 5.2 million tons ($1.1 billion)
Bulgaria: 1.5 million tons ($1.5 billion)
Poland: 4.7 million tons ($1 billion)
Lithuania: 1 billion tons ($1 billion)
Brazil: 967 thousand tons ($967 million)

These 15 countries accounted for about 90% of the total value of global wheat exports in 2020.

The top five wheat exporters (Russia, United States, Canada, France, and Ukraine) alone supplied over two-thirds (68%) of the total volume of global wheat exports in 2020.

Among the top exporters, some countries experienced significant growth or decline in their wheat exports from 2019 to 2020. The fastest-growing wheat exporters were:

Brazil: up by 240.6%
France: up by 62.4%
Australia: up by 40.5%
Poland: up by 40.4%
Kazakhstan: up by 34.7%

The countries that posted declines in their wheat exports were:

Ukraine: down by 47.2%
Russia: down by 6.9%

The main factors that influenced the performance of wheat exports in 2020 were the weather conditions, the production levels, the domestic demand, the export policies, the exchange rates, and the global market situation.

Challenges and opportunities for the wheat trade

The global wheat trade faces several challenges and opportunities in the coming years, as it is affected by various factors such as climate change, population growth, urbanization, income growth, dietary changes, technological innovation, trade policies, and geopolitical dynamics.

Some of the main challenges for the wheat trade are:

Climate change: Climate change poses a serious threat to wheat production and trade, as it can cause extreme weather events, such as droughts, floods, heat waves, and pests, that reduce yields, quality, and availability of wheat. Climate change can also increase the variability and uncertainty of wheat supply and demand, leading to price volatility and market instability. According to a study by the International Food Policy Research Institute (IFPRI), climate change could reduce global wheat production by 6% and global wheat trade by 11% by 2050.

Food security: Food security is a major concern for many countries that depend on wheat imports to meet their food needs. Wheat imports can be affected by various factors, such as production shortfalls, export restrictions, transport disruptions, price spikes, and political conflicts, that can limit the access and affordability of wheat for consumers. According to FAO, about 820 million people in the world suffer from chronic hunger, and about 2 billion people suffer from micronutrient deficiencies. Wheat is a staple food for many of these people, providing calories, protein, and essential nutrients.

Trade barriers: Trade barriers are another challenge for the wheat trade, as they can distort the market signals, create inefficiencies, increase costs, and reduce competitiveness. Trade barriers can take various forms, such as tariffs, quotas, subsidies, sanitary and phytosanitary measures, technical barriers to trade, and export bans or taxes. According to the World Trade Organization (WTO), the average applied tariff on wheat in 2019 was 25.8%, ranging from zero to over 300% among countries. Trade barriers can also affect the trade of wheat-related products, such as flour, pasta, bread, and animal feed.

Some of the main opportunities for the wheat trade are:

Demand growth: Demand growth is a key driver for the wheat trade, as it creates new markets and opportunities for wheat producers and exporters. Demand growth is driven by various factors, such as population growth, urbanization, income growth, dietary changes, and consumer preferences. According to FAO projections, global wheat consumption will increase by 13% from 2020 to 2030, reaching 817 million tons. The main regions that will contribute to this growth are Asia (especially China and India), Africa (especially North Africa), and Latin America (especially Brazil).

Technology innovation: Technology innovation is a crucial factor for enhancing the productivity, quality, and sustainability of wheat production and trade. Technology innovation can involve various aspects, such as crop improvement (e.g., biotechnology, precision agriculture, digital agriculture), post-harvest management (e.g., storage, processing, packaging), logistics (e.g., transportation, traceability, blockchain), and marketing (e.g., e-commerce, social media, big data). Technology innovation can also help address some of the challenges faced by the wheat sector, such as climate change adaptation and mitigation, food safety and quality, and environmental protection.

Trade facilitation: Trade facilitation is an important factor for improving the efficiency, transparency, and predictability of the wheat trade. Trade facilitation can involve various measures, such as simplifying and harmonizing customs procedures, reducing trade costs, enhancing trade infrastructure, strengthening trade institutions, promoting trade agreements, and resolving trade disputes. Trade facilitation can also help foster trust, cooperation, and integration among trading partners, as well as support regional and global food security.

Wheat Exporting Countries: Trends and Statistics

Wheat is one of the most important cereal crops in the world, providing food and feed for humans and animals. Wheat is also a major commodity in international trade, with many countries exporting and importing wheat to meet their domestic demand and supply. In this blog post, we will look at some of the trends and statistics of wheat exports by country, based on data from various sources.

Top Wheat Exporters in 2022

According to World’s Top Exports, the global export volume of wheat in 2022 was estimated at 211.43 million metric tons, an increase of 27% from 2014/15. The total value of wheat exports in 2022 was $66.2 billion, up 61% from 2018.

The top five wheat exporters in 2022 were Australia, United States, Canada, France and Russia, accounting for 61.7% of the global wheat exports by value. Australia was the largest wheat exporter in 2022, with shipments worth $10.2 billion, followed by the United States with $8.52 billion, Canada with $7.9 billion, France with $7.4 billion and Russia with $6.8 billion.

Among the top exporters, the fastest-growing wheat suppliers were Brazil (up 240.6% from 2021), France (up 62.4%), Australia (up 40.5%), Poland (up 40.4%), Kazakhstan (up 34.7%) and India (up 23.6%). On the other hand, Ukraine and Russia experienced declines in their wheat exports by -47.2% and -6.9%, respectively.

Wheat Export Destinations in 2022

The main destinations for wheat exports in 2022 were Egypt, Nigeria, Indonesia, China and Turkey, according to The Observatory of Economic Complexity. These five countries imported $17.26 billion worth of wheat in 2022, representing 26% of the global wheat imports by value.

Egypt was the largest wheat importer in 2022, with purchases worth $4.53 billion, followed by Nigeria with $3.32 billion, Indonesia with $2.98 billion, China with $2.94 billion and Turkey with $2.49 billion.

Among the top importers, China increased its wheat imports by 118% from 2021, while Turkey decreased its imports by -25%. The other three countries had moderate changes in their wheat imports, ranging from -3% to +6%.

Wheat Export Outlook for 2023

The global wheat export market is expected to remain stable or slightly increase in 2023, depending on the production and consumption trends in different regions. According to Statista, the global export volume of wheat is forecast to be approximately 215 million metric tons in 2023/24, a slight increase from 2022/23.

The main factors that could affect the wheat export market in 2023 are weather conditions, crop yields, demand fluctuations, trade policies and exchange rates. Some of the potential challenges for wheat exporters are droughts, pests, diseases, trade disputes and currency devaluations. Some of the potential opportunities for wheat exporters are rising incomes, population growth, urbanization and dietary changes.

References:

http://www.fao.org/faostat/en/#data/TP
https://www.statista.com/statistics/737926/wheat-export-volume-worldwide/
https://www.exportgenius.in/blog/global-wheat-exports-wheat-export-statistics-and-exporters-453.php
https://oec.world/en/profile/hs/wheat
http://www.fao.org/faostat/en/#data/TP
https://www.worldstopexports.com/wheat-exports-country/