Eight months ago wheat was at the center of concerns about running out of food as prices skyrocketed to record levels and some countries limited wheat export while other reduced import tariffs to temper consumer costs. The bursting of the commodity price bubble and larger wheat production in most major producing countries have returned the wheat market to its traditional function of moving wheat around the world to balance out supply and demand. That is no small task, and freer trade could make it easier.

The October 2008 estimates on global wheat production and trade from the Foreign Agricultural Service (एफएएस) of USDA show world production for the 2008/09 marketing year at a record 680.2 मिलियन मीट्रिक टन (एमएमटी), up sharply from the previous two year’s of 610.9 एमएमटी और 596.3 एमएमटी. Production for the two marketing years before that, 2004/05 तथा 2005/06, were above the long-term trend at 625.7 एमएमटी और 620.9 एमएमटी, क्रमश:. World consumption is forecast to increase sharply to 655.6 के लिए एमएमटी 2008/09 compared 618.1 एमएमटी में 2007/08 and the previous record of 624.2 एमएमटी में 2005/06. Trade is expected to be record large at 123.5 एमएमटी में 2008/09, ऊपर से 115.5 MMT for each of the two previous marketing years.

Record world production does not mean that every wheat producing country had a good crop. Among major exporters Argentina’s production is down 4.0 MMT and Kazakhstan is down 4.1 एमएमटी. Among importers Iran is down 5.0 एमएमटी, a one-third decline, and Pakistan is down 1.8 एमएमटी, ए 7.7 percent decline from last year, but close to the average for 2005/06 तथा 2006/07. Iran will shift from a minor importer of wheat to the eighth largest at 4.5 एमएमटी. Pakistan’s imports are expected to be up about 0.45 एमएमटी के लिए 2.0 MMT and its exports will be down 1.2 एमएमटी के लिए 1.0 एमएमटी. About a dozen other countries that import significant amounts of wheat will have increases in imports to meet demand growth and increase carryover stocks.

A few countries are major wheat and flour importers every year. Egypt tops the list with imports of 7.8 एमएमटी में 2008/09, followed by Brazil at 7.0 एमएमटी. Algeria and Indonesia will each import 5.6 एमएमटी, closely followed by Japan at 5.5 एमएमटी. The EU is both a major importer and exporter. EU imports will be down 1.9 एमएमटी के लिए 5.0 एमएमटी, while exports will be up 5.8 एमएमटी के लिए 18.0 एमएमटी. The EU had its best wheat crop since 2004/05 पर 147.2 एमएमटी में 2008/09 and is the world’s largest producer of wheat. South Korean imports are expected to be 4.6 एमएमटी में 2008/09, यूपी 1.5 एमएमटी, but much of that increase will be for feed for livestock and poultry. Wheat is mostly used for human food, but in recent years 15-18 percent of the wheat supply has competed with coarse grains for use as feed. That helps to balance out the market when wheat supplies are large or supplies of low quality wheat burden the market.
China and India play a minor role in wheat trade. China is the second largest producer of wheat at 114.0 एमएमटी में 2008/09 and exports on average about 2 एमएमटी. India is the third largest producer at 78.4 MMT and imports wheat in short crop years which it last had in 2006/07. China has large carryover stocks of 40-45 एमएमटी, while India has minimal carryovers of 4-7 एमएमटी.

The FAS trade report lists 26 countries that are expected to import 1.5 MMT or more wheat, flour and products in the 2008/09 marketing year and account for 72 percent of trade. The other 28 percent of imports, 34.1 एमएमटी, is by 160 plus countries. गेहूँ, flour and products are among the most widely traded agricultural products, which is not surprising because it is a starch stable and widely used in consumer products.

अमेरिका. should not think of wheat trade policy as someone else’s problem. As the world’s fourth largest wheat producer, fifth largest consumer and largest exporter, अमेरिका. cannot avoid feeling the economic impact of decisions by other or ignore the impact of U.S. decisions. Eight months ago there was an aggressive effort by some U.S. wheat users to limit exports to protect domestic supplies. अमेरिका. accounts for about 22-30 percent of exports and holds 7-11 percent of the world’s end of year stocks. Eliminating the stocks held by China and India which are not available to the market, अमेरिका. holds 12-18 percent of world carryover supplies.

Given the events earlier this year and the inability to think clearly about wheat trade policy is in a crisis, now is the time when production is up and trade is flowing to think about how to improve the outcome when supplies are short again. Some people would automatically suggest that the Food and Agriculture Organization (एफएओ) of the UN or some other international organization should hold a strategic reserve of wheat on behalf of all the people of the world. Those analysts who remember or have studied stocks plans of the 1970s and 1980s would see that as a non-starter.

Part of the problem eight months ago was that traditional wheat exporters pulled out of the market to some degree to protect domestic supplies. That shrunk the available supplies for trade when supplies were already short. Equally problematical were decisions to lower import barriers because of domestic shortages. Demand that previously had not been identified suddenly appeared and aggressively sought the limited supplies.

In this post-Doha era of multilateral trade policy, wheat is a candidate for an agreement to eliminate all import and export tariffs and import and export supply management programs. Wheat is regularly shipped across regions of the world. Weather and disease problems that cut production can occur in any country. Rather than have each producing and consuming country seek to shelter its domestic market from world market dynamics, now is the time to seek the economic efficiencies of more open trade. Every producing and consuming country would benefit from maximizing flows of wheat to where supplies are shortest and demand is greatest in any given year.