Global Wheat Market Faces Supply Constraints and Demand Shifts

Russia, the world's biggest supplier of wheat, is now experiencing a drop in wheat output during the 2024–2025 fiscal year. The analysts claim that the severe weather patterns and increased danger of spring dryness and frost in Russia's western area are to blame for that.

From February 15 to June 30, the Russian government imposed a 10.6 Mt wheat export quota to control domestic inflation caused by a reduced supply. In the meanwhile, Ukraine's supply is scarce due to a steep decline in opening stock and a 0.4% drop in output to 22.9 Mt this season (USDA). Because of this, the USDA predicts that exports from Russia and Ukraine will decrease by 17% and 14% each year, respectively, to around 45.5 Mt and about 15.5 Mt.

Even though Russia, the primary importer of Russian wheat, had a fall in output, Egypt anticipates a drop in demand because of slower economic development, as seen by the GDP's slower growth in 2023–2024. The cost of importing wheat from outside has either gone up or stayed the same, even though global wheat prices hit a four-year low in 2024. This is because the Egyptian pound is still trading close to historic lows compared to the US dollar.

News sources state that by the end of December, State grain buyer Mostakbal Misr had secured 1.267 million tons, enough to cover the nation's requirements through June. There will be demand from their end, though, since it added around 250,000 tons in January. The General Authority for Supply Commodities, Egypt's previous state buyer, used to acquire between 4 and 5 million tons a year, but this year's purchases will be progressively fewer.