Buoyed by tightness in the world wheat market and export controls imposed by a number of countries that made flour relatively more available and even less expensive than the grain, world trade in wheat flour in 2007-08 was forecast to gain 9% over the prior season. This outlook, presented by the International Grains Council (IGC) in its March Grain Market Report, represented a sharp reversal from previous assessments pointing to world flour exports holding barely steady with the reduced outgo in 2006-07. Instead, the latest forecast, 10,620,000 tonnes in wheat equivalent, would mean shipments on a par with 2005-06, which were the largest since the record of 11,186,000 tonnes in 1996-97.
At the indicated 10,620,000 tonnes of wheat equivalent, equal to about 175 million cwts of flour, the 2007-08 outgo compares with 9,750,000 tonnes in 2006-07 and 10,629,000 in 2005-06.
In noting the reversal from the export flour projection of last November, the IGC explained, "Tighter milling wheat availabilities and restrictions on grain shipments by some exporters have boosted purchases of wheat flour, most notably by countries in South America, the Commonwealth of Independent States (CIS) and Far East Asia."
For South America, the surge in imports largely reflected prospective record imports by Brazil, where the IGC estimated total takings for 2007-08 at 1 million tonnes in grain equivalent. That country’s imports, equal to 16 million cwts of flour, soared 52% from 660,000 tonnes in 2006-07 and contrasted with takings of 430,000 tonnes in 2005-06.
As the result of Brazil’s large purchases, Argentina moved into third place in global flour exports. The IGC projected Argentina’s flour exports in 2007-08 at 1,250,000 tonnes in wheat equivalent, compared with 975,000 in the prior season and double the outgo of 642,000 in 2005-06.
According to the IGC, export taxes imposed by Argentina, tied to duties placed on wheat, were still 10 percentage points less than on wheat flour.
The import total forecast for the CIS in 2007-08 was boosted to 2,080,000 tonnes of wheat equivalent, up 260,000 tonnes from the projection of last November. The latest estimate compared with 1,945,000 tonnes in 2006-07 and 1,522,000 in 2005-06. It would be a new record in CIS flour takings and also would exceed the totals of the Former Soviet Union.
Uzbekistan and Tadjikistan continued as the leading CIS importers. Major increases were indicated for Georgia, the total now placed at 225,000 tonnes, against 115,000 previously. Smaller regional importers, like Moldova, were projected to take 125,000 tonnes, against 37,000 previously.
Kazakhstan maintained its rank in 2007-08 as the world’s largest flour exporter, with shipments forecast at 1.9 million tonnes, against 2,025,000 in the prior year. Russia’s flour exports were forecast to rise to 500,000 tonnes, against 235,000 in 2006-07. Ukraine’s flour exports were expected to post a sharp increase.
Commenting on Kazakhstan’s role as the world’s leading flour shipper, the IGC cited not just the CIS, but also Afghanistan and Mongolia as the principal destinations for flour exports.
"The latest export data confirm strong regional sales," the Council said. It noted that the volume was being maintained in face of concerns about tightening in domestic wheat supplies.
In the case of the increased Far East Asia flour takings, the IGC attributed this gain mainly to expanded shipments of flour from China. Vietnam, the Philippines, Malaysia and Thailand were among countries that bought additional amounts of flour from China.
As a result, China’s flour exports were forecast to reach 900,000 tonnes in wheat equivalent, up 100,000 from the prior projection and 40% more than 645,000 in the previous season. This was the largest total of flour exported from China since 1997-98, when it reported shipments of 947,000 tonnes.
At the same time, the IGC noted that China has imposed a 25% export tax on wheat flour as well as export quotas, which will reduce shipments in the remainder of the marketing year.
The Council noted that competition from China resulted in a drop in prospective Australian flour exports to a five-year low of 275,000 tonnes, against 335,000 in the previous season and 325,000 in 2005-06. Australia has experienced a particular shortfall in its shipments to Indonesia.
In contrast with many import increases, takings by Iraq were projected to fall to 600,000 tonnes in wheat equivalent, against 855,000 in the previous crop year and 1,484,000 in 2005-06. The IGC said that recent purchases of milling wheat would indicate that wheat flour will account for 20% of Iraq’s total imports of wheat and flour in 2007-08, compared with nearly 30% in the previous crop year.
As the result of the drop in Iraq imports, exports of wheat flour from Turkey have slowed. The country, which a few years ago was the world’s leading exporter, was projected to ship 1 million tonnes in 2007-08, against 1,035,000 in 2006-07 and 2,250,000 in 2005-06.
After registering a decrease in every crop year since 1996-97, when its wheat flour exports reached a record 6,249,000 tonnes, the European Union (E.U.) was expected to post an increase in 2007-08. The IGC projected E.U. flour exports at 1.5 million tonnes of wheat equivalent, up from the low of 1,310,000 in the prior year. The E.U. outgo, which ranked that bloc second to Kazakhstan as a flour exporter, was below shipments of 1,941,000 in 2005-06 and 2,203,000 in 2004-05. The latest forecast for 2007-08 was up 200,000 tonnes from November, reflecting a steady pace of shipments and a marked increase in licenses awarded in recent months.
The United States (U.S.), which at the middle of the past century was the world’s leading flour exporter, also experienced an increase in shipments for 2007-08, but it still ranked as among the smallest flour shippers. According to the IGC, U.S. exports in 2007-08 will reach 425,000 tonnes in wheat equivalent, up 75,000 from November, and compared with 330,000 in 2006-07 and the low of 312,000 in 2005-06.
Three countries each were projected to ship 500,000 tonnes, placing them ahead of U.S. shipments. They were Pakistan, Russia and the United Arab Emirates.
Flour exporters not specifically identified were forecast to account for a larger share than usual of prospective 2007-08 flour trade, the IGC indicated. The forecast for "others" was raised to 1,235,000 tonnes of wheat equivalent, against 1,045,000 projected in November. The outgo for this category was 1,070,000 tonnes in 2006-07 and 969,000 in 2005-06.