Market Trends of Wheat Value Chain Analysis
Increasing Area Under Wheat Production Across the World
- Wheat is one of the principal cereal grains produced and consumed globally. It is grown on more land area than any other commercial crop and continues to be the most important grain food source for human consumption. This is likely because wheat can be cultivated in many areas with heterogeneous weather, elevation, or soil types.
- According to the Food and Agriculture Organization (FAO), the global wheat production in 2021 accounted for 770.9 million metric tons, and the global area harvested under wheat in 2021 accounted for 220.8 million hectares.
- Accordingly, Asian countries like China, India, and Australia, European countries like Russia, France, and Germany, and North American countries like the United States and Canada are the major wheat producers globally. Despite the increase in wheat production over the past few decades, developing countries have continued to import two-thirds of all the world's wheat trade flows, owing to the increased domestic demand.
- However, the demand for wheat has been relatively high and stable in North Africa and the Middle East, South Asia, East and Southeast Asia, South America, and Sub-Saharan Africa. Hence, the increased domestic and international demand for wheat, increased consumption, and increased area under wheat production are anticipated to drive the market studied during the forecast period.
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Asia-Pacific is Leading the Market
- In Asia-Pacific countries like India and China, wheat production has seen an increasing trend over the last few years. In India, the growth of the wheat market is driven by the major progressive policies implemented by the government. For instance, in 2022, the Indian government announced a ban on wheat exports, effective immediately, due to the sudden spike in global wheat prices and the resulting food security risks to India.
- The decision to ban exports results from the smaller-than-expected wheat harvest, rising food inflation, and low government wheat procurement under its minimum support price (MSP) program, which affects the Government of India's ability to supply wheat under its domestic food assistance/security programs.
- In Asia, grain consumption has increased more than 30% over the past 10 years as people diversified their diets. Wheat-based foods have become nearly as popular as rice due to the growing demand for flour and bread. Wheat production in China has significantly increased due to favorable weather conditions, input availability among farmers, and increased investment from the government. However, instances such as the Ukraine war have resulted in food risk as there has been a sharp decrease in wheat exports from Ukraine and Russia, which are major wheat-producing regions.
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