Of the ways that may be used to measure the vitality of flour milling around the world, one that offers the most acute analysis relies on export and import trade changes. As compiled several times in each crop year by the International Grains Council (IGC), this array of data provides keen insights into how flour milling is developing and changing. That is especially the case when the figures reveal that a country or countries that once were substantial importers of flour no longer rely on trade. The implications are a trifle less obvious when a country suddenly emerges as a leading exporter of wheat flour, but even here, the data serve as the basis for assuming that a new entry into exporting has experienced a surge in its milling capacity. The situation becomes clouded, though, when a country suddenly loses a major market or markets for its exports, which translates into excess capacity for the domestic milling industry.
Seeing countries that once were sizable flour importers sharply reduce or halt their takings, and in a few cases even become net exporters, is a development that may be described as commonplace in global milling. Every continent offers one or two examples of once thriving import markets that no longer rank as importers. These include the nations in Europe that in the wake of World War II destruction had to rely on imports before rebuilding their domestic milling industry. In the Middle East, Saudi Arabia’s situation reflects shifting emphasis from being a large importer of flour to expensive spurs to promote domestic wheat production, with a parallel buildup of domestic milling, and the more recent decision to halt its wheat incentives, while milling imported wheat. In Asia, once large markets like Sri Lanka and the Philippines now produce sufficient flour to meet their own needs. In South and Central America, Venezuela, Cuba and, more recently Haiti, stand out as instances where a newly-built domestic industry curtailed or halted imports.
The Middle East/North Africa region provides the latest examples of import markets lost to domestic expansion. According to the IGC’s latest trade data, two Middle Eastern nations, Egypt and Yemen, at one time ranked as the world’s largest flour importers, are no longer importing commercial quantities. Libya, which not long ago imported much more than 1 million tonnes annually, is rapidly shrinking as a flour market.
Recent examples of the impact of export losses are the European Union (E.U.) and Turkey. The E.U. is no longer the leading flour exporter, slipping to second or third place, and forecast to ship 1.5 million tonnes in wheat equivalent in 2007-08. At its peak in 1996-97, the E.U. shipped nearly 7 million tonnes. Considering the size of the E.U., that probably represented less of a shock than what millers in Turkey have endured. From exports of more than 2 million tonnes of wheat equivalent in 2005-06, Turkey’s shipments were more than halved, largely because of the loss of Iraq.
The world’s leading flour exporter the past two crop years, Kazakhstan, emphasizes how flour milling is changing and evolving. Similarly, a surge in exports by China underscores infrastructure improvements that allow millers to take advantage of high wheat prices and limits imposed on exports from other countries to seize a large stake in global flour trade. And then there’s Argentina, which has recently experienced farmer strikes but which for the first time in its history rose to second rank as a global flour exporter due to expanding demand from neighboring Brazil.
Highly volatile wheat prices as well as the varied ways in which countries reacted to this situation account for some of these swings in global flour trade. But it is also important to recognize the thrust provided by developments within the industry itself, including construction of new plants and modernization of others. The result is the unfolding of one of the most dynamic eras in the long history of flour milling.