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Trade4go
Apr 4th, 2025
Original content
The global wheat market is expected to experience significant import volatility among key buyers in the 2025/26 marketing year (MY). Turkey's wheat imports could rise due to increased domestic demand, but projections vary widely from 4 million metric tons (mmt) to 10 mmt. Similarly, Egypt’s wheat imports are expected to range between 10 mmt and 13 mmt, constrained by economic, social, and political challenges. Meanwhile, China’s wheat import outlook remains highly uncertain, fluctuating between 3 mmt and 14 mmt, making it difficult to predict. Collectively, wheat imports by these three countries could range from 17 mmt to 37 mmt, a deviation from the estimated 23 mmt to 24 mmt in 2024/25. Such wide variations in import demand present atypical challenges for global wheat markets, potentially influencing trade dynamics and price stability.
According to the Monitoring Agricultural Resources (MARS), the European Union (EU) wheat harvest is expected to improve in 2025, with common wheat yields projected to rise by 8% year-on-year (YoY) to 6 metric tons (mt) per hectare (ha), exceeding the five-year average by 4%. Durum wheat yields are also set to increase by 4% YoY to 3.7 mt/ha, 8% above the historical average. The overall condition of winter crops in most EU regions was favorable in early spring, with fewer areas affected by adverse weather compared to the previous year. However, extensive crop damage was recorded in parts of Romania and Bulgaria, while the worst conditions were observed in eastern Ukraine. Despite the improved outlook for production, EU common wheat exports from Jul-24 to Mar-25 fell by 35% YoY to 15.46 mmt, while imports declined by 14% YoY to 6.12 mmt. Additionally, wheat imports from Ukraine dropped to 3.99 mmt, reflecting a decrease from the previous season.
Exacerbated by political disputes, the diplomatic tensions between Algeria and France, have led to a sharp decline in French wheat exports to Algeria, which was once its primary buyer. Previously sourcing about 80% of its wheat imports from France, Algeria has now shifted entirely to alternative suppliers such as Russia, Ukraine, Romania, and Bulgaria. French wheat exports to Algeria plummeted from 5 mmt in 2019 to just 1.5 mmt in 2024, with expectations of reaching zero in 2025. This decline is attributed to strained political relations, heightened after France recognized Morocco’s claim over Western Sahara, and Algeria's deliberate efforts since 2020 to diversify its wheat sources for food security. Additionally, Algeria has imposed stringent technical requirements on wheat imports, effectively pushing France out of its market. Despite attempts to redirect wheat exports to Morocco, France has been unable to offset the loss, significantly impacting its agricultural sector, which has now fallen to fourth place among France’s exporters to Algeria.
According to the United States Department of Agriculture (USDA), Algeria's wheat production is expected to remain stable at 3 mmt in the 2025/26 season, necessitating wheat imports of 9.2 mmt to meet domestic demand. Russia remains the top wheat supplier, while Ukraine has gained market share as France’s exports decline. Wheat consumption is projected to reach 11.9 mmt in 2025/26, driven by Algeria’s high bread consumption of 110 kilograms (kg) per year, which is among the world's highest per capita and remains heavily subsidized. The country’s milling sector, consisting of around 432 mills, is expected to maintain steady operations without significant expansion.
According to the National Interprofessional Office of Cereals and Legumes (ONICL), Morocco will extend its soft wheat import subsidy program until December 31, 2025, as the country continues to face supply challenges due to prolonged drought. Backed by Morocco’s finance and agriculture ministries, the decision indicates that the domestic wheat harvest will be insufficient to meet demand, necessitating continued imports. In past years, Morocco restricted imports during good crop seasons to protect local production, but the country has relied heavily on foreign wheat in recent years due to successive poor harvests. Last year, total wheat and barley production fell by 43% YoY to 3.1 mmt, reinforcing Morocco’s dependence on the EU and Russia as key wheat suppliers. To stabilize the market, ONICL also announced subsidies for importers to maintain wheat stockpiles from April 1 to December 31, ensuring supply continuity.
New Wheat Harvest Pressures Traders as Ukrainian Farmers Accelerate Sales
The approach of the new wheat harvest is pressuring traders with long positions, prompting increased sales to manage supply levels and stabilize prices in the foreign market. Ukrainian farmers are accelerating wheat stock sales, anticipating current prices to be the peak before the discounted new harvest enters the market. As a result, the price gap between old and new crop wheat is narrowing. In Odesa ports, 11.5% wheat was traded at between USD 212/mt and USD 214/mt delivered at place (DAP), while feed wheat stood at USD 202/mt to USD 204/mt DAP. Ukrainian wheat exports totaled 12.98 mmt as of March 28 in MY 2024/2025, reflecting a 4.06% decline compared to the previous year. Despite ongoing war-related challenges, Ukraine is well-equipped for the spring 2025 sowing campaign, with sufficient inputs such as diesel fuel and fertilizers sourced primarily through imports. Looking ahead, Ukrainian farmers plan to expand wheat cultivation alongside corn and industrial crops like soybeans, rapeseed, and sunflower, driven by their strong profitability.
The United States’ (US) withdrawal from certain markets is expected to have a limited impact on global wheat prices, as the market remains more influenced by harvest conditions in the Black Sea and Australia. While the absence of US exports may slightly adjust global supply dynamics, it is unlikely to cause significant price shifts since the US accounts for only 5% to 6% of global wheat exports. Instead, wheat prices have been declining due to favorable weather conditions in key production regions, including the Black Sea and the US Midwest, as well as improved winter wheat ratings in Kansas. Additionally, weak US wheat sales and market reactions to ongoing peace talks in Ukraine have contributed to the downward trend. Further pressure on wheat prices comes from market uncertainty surrounding upcoming US trade tariffs and the continued arrival of beneficial rains in major wheat-producing regions, reinforcing the bearish sentiment.
US free on board (FOB) wheat prices averaged USD 0.24/kg in W13, marking a 4% week-on-week (WoW) drop and a 7.69% YoY decline, though still 9.09% higher month-on-month (MoM). The price drop is primarily attributed to increased market stock, with US wheat reserves rising by 14% YoY to 33.75 mmt as of March 1, according to the USDA. Additional downward pressure on prices may have stemmed from the US withdrawing from certain export markets, increasing domestic supply. Moreover, improved weather conditions in key wheat-producing regions such as the Midwest and Kansas may have further contributed to the decline. Further uncertainty surrounding proposed US trade tariffs adds additional pressure on wheat prices, as traders remain cautious about future market conditions.
In France, wholesale wheat prices averaged USD 0.23/kg in W13, marking a 4.17% WoW decline. Despite this drop, prices remain 4.55% higher MoM and 9.52% above the levels recorded in the same period last year. The price decline is largely attributed to increased market supply, driven by weaker export demand, particularly from China and Algeria. According to the French National Institute for Agricultural and Marine Products (FranceAgriMer), France’s soft wheat exports are projected at 3.2 mmt, a 200 thousand mt reduction from the Feb-25 forecast. This downward revision reflects lower shipment volumes, as French ports have handled 7 mmt less wheat compared to the same period last season. However, domestic consumption for animal feed is expected to reach 14 mmt, an increase of 100 thousand mt from the previous forecast. This higher feed demand is expected to help offset surplus wheat in the market to some extent.
In W13, Ukraine’s FOB wheat prices averaged USD 0.25/kg, remaining unchanged from the previous week and month, but marking a 25% YoY increase. Since W4, prices have remained stable at USD 0.25/kg, the highest level in over two years. Despite this stability, the price per mt has fluctuated between USD 245/mt and USD 252/mt during this period. The elevated price level is likely due to traders holding long positions, which has limited market supply. However, prices may begin to decline in the coming weeks as traders increase sales ahead of the new wheat harvest, leading to an anticipated rise in market supply.
As global wheat imports face significant volatility, particularly with countries like Turkey, Egypt, and China, it is essential for wheat-importing countries to diversify their import sources. Importing countries should secure contracts with a broader range of suppliers to avoid dependence on a few sources, especially during times of geopolitical tension or unpredictable harvests. Countries like Algeria and Morocco, facing potential supply shortages, should continue to build diversified wheat supply chains and invest in long-term supplier relationships. This strategy ensures stability and reduces risks associated with fluctuating global markets.
For countries like France, which have seen a decline in wheat exports due to political tensions, maintaining strong diplomatic ties and engaging in active trade negotiations is critical. Diplomatic efforts must focus on resolving trade barriers and technical requirements to regain access to key markets. Countries reliant on wheat exports should work on strengthening trade relations with alternative markets and resolving political disputes that may hinder their agricultural exports. For example, France may need to adjust its trade strategy and seek new regional partnerships to offset losses in Algeria.
Countries with limited market share, like the US, should closely monitor global wheat market dynamics and adjust export strategies accordingly. Given the uncertain global trade landscape and competitive markets, US wheat producers may need to consider shifting focus to more profitable regions or alternative crops. Additionally, monitoring emerging markets and being prepared to re-enter key regions, as market conditions shift, will allow exporters to optimize their positions without significant losses. For instance, tracking peace developments in Ukraine could provide opportunities for re-engagement in critical wheat markets in Eastern Europe.
Sources: Tridge, TerreNet, UkrAgroConsult
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