Wandile Sihlobo, head of economic and agribusiness intelligence at Agbiz, shares highlights in his update on agricultural commodity markets.

Sub-Saharan Africa’s 2017/2018 wheat imports up by 18% y/y

Drier and warm weather conditions have kept the United States (US) wheat on the back foot. On 08 April 2018, farmers had planted only 2% of the intended area for spring wheat; well below the area planted at the corresponding period last year (2017), according to data from the United States Department of Agriculture (USDA). These delays were mainly caused by persistent dry conditions in some states.

At the same time, the US winter wheat crop conditions were rated 30% good/excellent, which is 23 percentage points lower than the same period last year (2017). This too was largely due to persistent dry conditions in winter wheat growing areas. The USDA will release an update of US crop conditions later today (16 April 2018). It is most likely that there is marginal progress from the aforementioned rates, as a large part of last week (ending 13 April 2018) was mostly dry and cool in US wheat growing areas. Improvement could be seen if the expected rainfall this week (ending 20 April 2018) materialises.

From a global perspective, the wheat market is well supplied. Last week (ending 13 April 2018), the USDA placed its 2017/2018 global wheat production at 758 million tons, up by a percentage point from the previous season. At the same time, the ending stock was estimated at 271 million tons, up by 6% from the 2016/2017 season.

This means that key wheat importing regions such as North Africa, the Middle East and sub-Saharan Africa, amongst others, will be well supplied in the 2017/2018 season, despite the decline in production in countries such as the US, Canada and Australia. The uptick in global supplies is boosted by a large harvest in Russia and India. The USDA forecasts sub-Saharan Africa’s 2017/2018 wheat production at 26 million tons, up by 18% from the previous season. This equates to a 14% share of global wheat imports (see Chart below).

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