Global flour exports in the 2014-15 crop season have the potential of rising 6% over the previous year, according to the initial forecast for the new season issued by the International Grains Council (IGC). While up from the prior year, the prospective trade will fall 10% short of the all-time record set in 2011-12.
The IGC projected world flour exports in 2014-15 at 13,150,000 tonnes of wheat equivalent, compared with 12,380,000 shipped in the season drawing to a close this month. The export peak was 14,560,000 tonnes in 2011-12. Flour exports in the 21st century did not exceed 10 million tonnes until 2004-05. This figure also was surpassed in several years of the last decade of the 20th century.
In estimating export flour trade, the IGC does not include shipments of durum semolina. That trade for 2014-15 was 360,000 tonnes, against 350,000 in the prior year. Adding that to the export total makes an aggregate for 2014-15 of 13,510,000 tonnes, against 12,739,000 in 2013-14 and a peak slightly below 15 million in 2011-12.
In forecasting a 770,000-tonne increase in world flour trade, the IGC said the gain was “driven by higher needs in Syria, the return of Indonesia to the market following the softening of import restrictions and the re-emergence of Argentina’s supplies in South America.”
So far as flour exporters are concerned, the IGC compiles data for 16 countries, of which only one, Canada, is expected to post a reduction in 2014-15 from the prior year. The other 15 exporting countries were forecast to show gains or hold unchanged.
Notable among the top exporters were the back and forth between Kazakhstan and Turkey as the world’s leading flour exporter. For 2014-15, Kazakhstan returned to the No. 1 position with expected shipments of 3.2 million tonnes, against 3 million in the previous year and its peak of 3,652,000 in 2011-12.
Turkey moved to second place in 2014-15 projections, placed at 2.9 million tonnes, compared with its leading 3.2 million shipped in 2013-14. In the record year of 2011-12, Turkey shipped 3,013,000 tonnes of flour in wheat equivalent.
In commenting on Turkey’s shipments, the IGC said its mills were benefiting from strong demand by both Syria and Indonesia. Due to a reduced wheat crop in Turkey this year, the Council said that part of its flour export business will be filled by grinding imported wheat, known as “secondary processed trade.”
Such secondary trade also will be important for Sri Lanka, which was forecast to ship 200,000 tonnes, against 120,000 in the prior year. Growing demand from Indonesia has boosted Sri Lanka’s flour exporting.
One of the sharpest increases in flour exports was registered by Pakistan, with its outgo in 2014-15 projected at 400,000 tonnes, against 300,000 in the preceding year. The IGC noted that increased demand in world markets diverted Kazakhstan supplies from the Afghan market, “providing increased opportunities for Pakistan traders.”
The only other exporter of more than 1 million tonnes was the European Union, at 1.1 million tonnes, unchanged from the preceding year. Argentina followed in the new year, at 900,000, compared with 200,000 in 2013-14, when exports were barred as the result of a short wheat crop. Argentina as recently as 2011-12 shipped 1,239,000 tonnes.
After many years of showing exports by the United Arab Emirates (UAE) at 1 million tonnes and higher, the IGC placed its exports in 2014-15 at 600,000 tonnes, against a reduced 550,000 in the previous year. The revised flour export figures for the UAE resulted in a downward revision of world flour exports in the two prior seasons. It attributed the decrease to reduced UAE shipments to “unreported/unspecified destinations.”
Pakistan’s exports of 400,000 tonnes were identical to shipments by both China and the United States. The Canadian decrease was to 200,000 tonnes, against 245,000 in 2013-14.
Afghanistan top importer
The three leading import destinations uniquely lined up — Afghanistan in the lead at 1.5 million, followed by Uzbekistan at 1.4 million, and Iraq at 1.3 million. These totals were nearly unchanged from the prior crop year. The IGC said their takings were spurred by rising consumption and abundant wheat supplies in their flour sources.
One of the most dramatic increases in flour imports expected in the new season is Indonesia’s imports of 800,000 tonnes, against only 300,000 in 2013-14. The increase reflected the government’s action in May of introducing a flour import quota of 441,141 tonnes for the period ended in December, assigned as 251,450 to Turkey, 136,754 to Sri Lanka and 22,057 for Ukraine, with the balance to come from optional origins. Outside the quota, a duty of 5% will be imposed, which is a steep reduction from the previous 20% duty on flour imports.
Syria’s imports were forecast for 2014-15 at 700,000 tonnes, up from 500,000 in the preceding year. Brazil’s likely imports were also forecast at 700,000, against 300,000 in 2013-14 and the recent peak of 903,000 in 2011-12.
“Brazil’s imports,” the IGC said, “are likely to return closer to the levels seen in recent years, but final demand will depend on the quality of the domestic harvest and the volume of licenses granted by Argentina.”
On a continental basis, Far East Asia maintained its lead in flour importing, with a total of 3.6 million tonnes of wheat equivalent, compared with 3,210,000 in 2013-14. Africa accounted for imports of 2.4 million tonnes, Near East Asia for 2.3 million, Commonwealth of Independent States, 2,350,000, and South America, 1,040,000.
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Industrial use of grain — for making fuel, starch and beer — was seen by the International Grains Council (IGC) as rising 2% in 2014-15 and setting a new record. The total of grains the IGC determined will be processed industrially in the new season was 318.3 million tonnes, compared with 313.2 million in 2013-14 and 296 million in 2012-13.
Maize, or corn, will continue to account for most of the industrial grain use, estimated at 258.4 million tonnes in 2014-15, against 255.2 million in the preceding year. The barley forecast for 2014-15 was 30.3 million tonnes, against 30 million in 2013-14. Global industrial use of wheat in the new season was projected at 19.3 million tonnes, against 18.6 million in the preceding year.
Slightly more than half of the worldwide industrial use of grain occurred in the United States, where the total was 164.4 million tonnes, up a little from 164 million in the previous year and compared with 153.9 million in 2012-13.
The European Union, in total, was forecast to use 35.4 million tonnes of grain for industrial purposes, up 1 million from 2013-14. Canada was projected to process 6.3 million tonnes, the same as in the prior season.
In commenting on the demand outlook, the IGC said, “Large global grain supplies should keep raw material costs attractive in the year ahead, especially for maize-based starch and ethanol production, while strengthening economic growth will help to bolster demand for industrial products.”
The Council said that most of the demand growth in the new crop year will be linked to rising consumption of starch-based products. It explained that starch is used as an ingredient in many processed foods as well as in non-food applications. The latter include adhesives, paper and textile manufacturing, construction and pharmaceuticals.
For 2014-15, the IGC forecast world grain use for making starch at 111 million tonnes, up 3% from 108.2 million in the previous season.
Global use of grains to make ethanol, as well as biofuels, will account for processing of 168.8 million tonnes, against 167.4 million in 2013-14 and 156.1 million in 2012-13.
While the United States continues far in the lead as a manufacturer of ethanol, its output “is now close to the maximum level for the most common E10 blend,” the IGC said. As a result, gains are occurring in countries like Argentina, Brazil and the E.U.
World use of grains for brewing in 2014-15 was forecast at 37.5 million tonnes, against 36.7 million in 2013-14 and 35.6 million in 2012-13.
“Reduced raw material costs have been beneficial for the global brewing sector, especially for beer producers,” the IGC noted. It added that beer demand was showing robust growth in South America and in a number of countries in Pacific Asia.