Global flour milling patterns that surprise

by Morton Sosland
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The International Grains Council, in its 2000-01 World Grain Statistics presents estimates of flour production in major countries that provide important insights into the trends in milling in the final decade of the 20th century. And while the I.G.C. for some years has not estimated world production of flour, the data available for 2000 would indicate that output gains increased as the turn of the century neared. This is the case, even though statistics are not yet available on 2000 production in several ranking countries, such as Germany, Iraq and Iran. In addition, France unilaterally decided to report its flour production in 2000 by excluding production destined for industrial processing into starch and gluten, resulting in a reduction in its output as reported, which probably distorts the overall picture.

Looking at the rate of annual changes in flour output in major producing countries shows significant increases in a number of nations. Romania accounted for the largest increase among the major European millers, up 13.5%. This more than offset the 12.2% decrease in Poland’s flour output. Turkey’s growing importance as a flour producer was indicated by its chain of annual increases, including a rise of 3.5% in 2000 production.

In Asia, increases dominated, led by Korea’s gain of 5.7%. Production in Indonesia rose 4.5% as that country resumed its upward trend after several years of output cutbacks due to limited wheat imports. China’s leading position as a flour producer, turning out 78,750,000 tonnes in 2000, showed a 1% rise for the second straight year.

Examining production trends in the decade from 1990 to 2000 shows a startling leader. Canada, turning out 3,510,000 tonnes in 2000, posted the sharpest increase of any country in the decade with a rise of 94.9%. Indonesia’s production in 2000 reached 2,167,000 tonnes, up 68.6% from 1990s total, and the second largest increase. Australia, producing 2,030,000 tonnes, registered a decade-long increase of 48.7%, which puts it in third place. The fourth largest increase of the decade occurred in Egypt, with output in 2000 of 4,610,000 tonnes, up 30.5%.

Production in Russia fell 34.1% to 10,338,000 tonnes. This was the only large reduction for the decade. The IGC data are especially surprising because they indicate that output may have increased more in developed nations than in the developing world. In North America, for example, Canada’s leading gain overshadowed a strong 18.9% increase in U.S. output. The latter totaled 19,106,000 tonnes, placing America as the second largest flour producer in North America. But Mexico posted a gain of only 1.2% to 2,538,000 tonnes.

In South America, Brazil proved an outstanding performer, with its 2000 output of 6,789,000 tonnes up 27.2% from the decade’s start. Similarly in North Africa, Morocco achieved an impressive gain, 28.4%, in the decade, to a total of 2,370,000 tonnes.

The IGC emphasizes that its statistics are mainly for commercial mills, and, thus, underestimate output in some developing nations. This is particularly so in India, where output reported in 2000 at 2,443,000 tonnes is actually down from the start of the decade. This doesn’t seem realistic. Not having current figures for such important Middle East producers as Iran and Iraq also accounts for a distorted picture of the evolution of the global flour milling industry. Extremely high per capita consumption levels in many of these countries, on the order of twice the rate in some developed nations, would indicate a booming milling industry.

Even with these deficiencies in numbers, the picture that emerges is one of a buoyant milling industry, albeit one that in some parts of the world is burdened by excess capacity and intense price-based competition. At the same time, expanding demand for bread and other flour-based foods augurs well. Thanks to the IGC data, a picture emerges of production patterns that surprise, but that’s not unexpected in a vital business like flour milling.