The balance in the wheat markets is more fragile than ever, and this tends to continue. This was stated by the analyst of the commodity market Horizon soft Commodities Clement Gauthier.
It is reported by “ProAgro Group” with reference to Terre-net.
In his opinion, three main factors increase tension and fluctuations in commodity markets. First, it is the increase in world population: “the more we are, the more we consume and the more we have to produce”.
Since 2000, annual wheat consumption has increased by 33 MMT in India, 13 MMT in China, 7.5 MMT in Pakistan.
Secondly, it is the growth of world meat consumption, which implies an increase in feed grain consumption. Since 1991, these figures have gone up by 102.9% for all types of meat and due to poultry consumption in China.
And finally, the increase in climate disasters that affect crop yields. “There are concerns about drought in southern China, heavy rains are expected in India… Bad weather conditions will strain balances”.
World wheat production is one of the largest in history.
But the stress factors remain. This dynamic consumption should lead to a sharp drop in the ratio of stocks to consumption. “There is less and less wheat among those who sell it,” the expert concludes. If the eight major world exporters remain at this level of tension, prices will remain high in 2023/24″.
