Weather and global conflicts adding to volatile wheat market
Other countries are also facing adverse weather and supply chain challenges, adding to volatility in the wheat market.
While a cool, wet spring has pushed US winter wheat conditions below average, Gregg Doud with Aimpoint Research tells Brownfield extreme heat is plaguing the crop in India.
“The USDA, and I think rightfully so, had indicated that India might increase their wheat exports from about 2.5 million up to 8 million tons, but recently India has said that’s not going to happen. That changes the wheat balance sheet and equation pretty significantly.”
Doud says Kenya is another important player because they are both a big producer and importer of wheat, but the high cost and lack of availability of inputs like fertilizer has farmers there expecting to grow far less this year. Plus, he says, “In Kenya right now, wheat is 50% higher than it was a year ago, so it is much more expensive to import.”
Doud says countries like India and Kenya were looking to increase exports to make up for less wheat coming out of the Black Sea region, but these emerging implications are ones many did not see coming when the war in Ukraine began two months ago.