China to overtake EU as the world’s largest wheat producer in 5 Years : IGC

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China could overtake the European Union as the world’s largest wheat producer over the next five years even as global wheat production will climb to record highs, buoyed mainly by increases in yields, according to the International Grains Council (IGC).

World’s output of the grain is expected to climb to 822 million tons by 2025/26, up 7.5% from the levels in 2020/21 with the strongest net production gains seen in Argentina, Ukraine and the European Union.

However, sustained levels of government support will help China’s productivity as well.

There will be sustained increases over the same period to successive record highs, although much of the accumulation is expected in China. However, there will be a drawdown in stocks in India.

Highly-mechanized field operations have enabled wheat plantings to proceed well despite covid-19-related restrictions in some countries affecting the labour movement.

The most stringent virus-related controls were only in place for about one quarter of the 2019/20 marketing year in many countries, and consumer activity started to pick up again from late-June, says the IGC.

Consumption undisturbed by pandemic

The overall impact on human food use of wheat in 2019/20 was therefore limited, with estimated global growth for the whole year of 1.3% — only about 0.2 percentage points less than the average in the prior five years.

Initial concerns about possible shortages of key farm inputs, including seeds and fertilizers, have also not materialized with global supply chains functioning relatively efficiently.

After gains in the prior two seasons, world harvested area is forecast to decline in 2021/22, mainly tied to an expected reduction in India, following a very sharp increase in the previous year.

This is being exacerbated with a drop also foreseen in Russia, where there is a risk of higher than average winterkill losses following sustained dry weather.

Wheat is the main winter crop in India, especially in the breadbasket northern regions, where farmers are at the forefront of protests against three key legislations for agriculture reforms that have been introduced by the government.

Global wheat area is expected to edge higher again from 2022/23, although the increase in acreage will likely be curbed by strong competition from other crops, including maize and soybeans.

Strong profitability is projected to drive up wheat area in Russia mainly for better-yielding winter varieties. A steadier outlook is seen for the European Union nations, but with sowings predicted to remain larger than average across the forecast period.

Biman Mukherji is a columnist and consulting editor at Indoasiancommodities.com. He has worked for international news organisations such as Reuters, The Wall Street Journal as well as for newspapers like The Times of India. He can be reached at biman.mukherji@indoasiancommodities.in

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