The price of wheat on the entire global market, like that of other cereals, has always been very low, undergoing little change
over the decades.

For the 2024 harvest, the prices of bread-making soft wheat stood at around €225/t, thus falling to a level around 8% lower than in 2023, when the product was traded at around €280/t, while those of durum wheat, again for the 2024 harvest, stood at around €300/t. According to estimates by financial analysts, the durum wheat market is set to record a constant increase in the coming years, and in particular in the decade 2020 – 2030. This is due to numerous factors including the development of the taste for pasta among a large world population and the demographic growth of African countries.

Cargo crane, ship and grain dryer in Port Odessa, Ukraine. Ukrainian exports were filled in 2023 by Russian exports. 123rf

The price of wheat, both soft and durum, depends fundamentally on three basic factors: the quantity of product available; the following year’s sowing forecasts and the quality of the wheat. To these are then added the variables determined by meteorological aspects, the volatility of financial markets, the price of hydrocarbons and phosphates, and geopolitical dynamics. Consider in this regard that in 2021 the disproportionate increase in temperature in Canada and the USA caused production to plummet (especially of durum wheat), influencing price increases in the autumn period, while in 2022, the effects produced by the Russian-Ukrainian war considerably upset the market, unsettling the balance at a global level.
If we look closely, in fact, the two countries involved in the war together represent 30% of world exports, and specifically Russia accounts for 18% and Ukraine for 11%. During the war, in fact, wheat was used as an element of geopolitical pressure, entering the sights of the belligerents. The Russians, in particular, have hit farms and cultivated fields, but also product storage centres, processing plants and transport infrastructure.

Egypt. Fayoume City. Making bread. Bread is a staple food in the Egyptian diet. Egypt imports 85% of its grain from Russia. © FAO/Ami Vitale

Furthermore, the consequent closure of ports in the Black Sea area by Moscow has led to the blocking of grain exports from countries not directly involved in the conflict, such as Kazakhstan, whose product is of excellent quality, but also the disruption of import markets and in particular those of the North African strip such as Tunisia which before the conflict depended on Ukraine for about half of its wheat supplies, importing about 47%.
In addition to Tunisia, there is Egypt where 85% of grain imports come from Russia (52%) and Ukraine (33%). Also, 75% of the cereals imported by Libya come from Ukraine and Russia, while Morocco imports 21% of its grain needs from Ukraine. Then there are countries that are totally dependent on grain imports from Ukraine and Russia like Eritrea, or nearly so like Somalia which is 90% dependent.
The void created by Ukrainian exports was filled in 2023 by Russian exports. In the same period, Russia also increased wheat exports to the regions of sub-Saharan Africa, also in order to use this resource as a soft power tool, to magnify its presence and extend its influence.
In the opinion of some analysts, even the July 2022 agreement for the export of wheat produced on the Black Sea coast, essentially Ukrainian wheat, mediated by the Turkish government, would have had the purpose of maintaining in African and Middle Eastern countries, largely dependent on Ukrainian wheat imports like Lebanon and Ethiopia
at 70% and 60% respectively, that attraction that they feel towards
the Russian Federation.

Loading of grain on a ship. 123rf

This closeness on the part of these countries had, a few months earlier, also been expressed within the General Assembly of the United Nations by their siding with Moscow in the vote that condemned the invasion of Ukraine. Therefore, in the opinion of analysts, the need to avoid the possibility that the lack of access to wheat by these countries could induce Ukraine and the Western allies to discredit the Russian Federation in their own eyes and those of the entire “global South” that represents the vast majority of humanity, has caused Putin to contravene the cruel rules imposed by war, which provide for the strangulation of the enemy also through the use of food resources, allowing their export.
The impact of the war on the sector and the relative change in global trade flows has also caused significant upheavals within the European market, resulting in tensions in the first months of 2024 as farmers took to the streets with their tractors in protest. (Open Photo: Rising wheat prices due to the conflict between Russia and Ukraine. Shutterstock/Miha Creative)
 F.R.

The Asia-Pacific region is emerging as a key region in the wheat market especially that of flour. This is also due to the change in the diet of its consumers, who have switched from rice to wheat products, and also due to the presence of fewer carbohydrates in this cereal compared to rice.

They are now more inclined to wholemeal bread because they consider it more nutritious. However, the demand for flour is also dictated by a change in the cultural paradigm and the frenetic lifestyle of consumers in this area, which leads them to increasingly orient themselves towards ready-made foods and which has generated a growing adoption of Western foods, such as pizza, hamburgers and pasta. These foods have driven the demand for restaurants and food service operators intent on satisfying the ever-increasing food demands of the population.
In particular, according to data provided by the United States Department of Agriculture (USDA), it would emerge that in the 2021-2022 marketing year, China consumed approximately 148.5 Mt of wheat, while India consumed 104.2 Mt.

Traditional Chinese food, steamed dumplings served on the table in a wooden dish. China is one of the world’s leading wheat importers. 123rf

In particular, the People’s Republic of China is the leading producer of wheat globally with a harvest of approximately 137 Mt, again as reported by the USDA, and with a self-sufficiency rate in wheat production equal to 93%.However, despite its high internal production, in 2023 China was again among the leading importers of wheat globally with approximately 12 million tons purchased, making Beijing the country that holds a wheat stock equal to 51.7% of the world total. The reasons that push China to import such a large quantity of wheat, which corresponds to more than half of global reserves, are not yet known, however, the answers could lie both in the desire to support the development of the livestock sector and in possessing large quantities to try to determine future prices, but also by the need to maintain sufficient resources to feed its population that exceeds one billion. Indeed, as highlighted by some analysts, the considerable increase in wheat reserves follows the massive floods that are estimated to have compromised 30% of the harvest in the most affected areas, and the Covid-19 pandemic which with its very strict lockdown has severely limited access to food for millions of people also due to the serious shortcomings of Chinese logistics. On closer inspection, these hypotheses are not far-fetched if we consider that the Chinese law on food security 2024 was recently passed, through which it is intended to achieve “absolute self-sufficiency” in basic cereals, intervening precisely in inefficient agricultural techniques, supply chain bottlenecks and environmental damage caused by the agricultural sector. To this end, it is intended to incentivise investments in high-tech equipment, make production more efficient and introduce severe food waste control measures.

Indian farmer holding crop plant in his wheat field. India is the world’s third largest producer of wheat. 123rf

The objective intended to be achieved through this law is, without a doubt, self-sufficiency in the cereal sector to reduce the country’s susceptibility to global market volatility and geopolitical concerns that could interrupt food supplies. It is clear that China, pursuing self-sufficiency, could reduce the quantity of imported cereals, with potential repercussions on the main cereal exporting countries such as the United States, Brazil and Australia. The drop in demand could, as a result, lead to a reduction in global grain prices, damaging the income of these exporting countries. In the Indo-Pacific region, India, with approximately 110 Mt, is also in third place for global wheat production. However, the country has a stock problem caused by the drop in production in previous years. The lower wheat production in these periods forced the Government to make a record sale of approximately 10 Mt of wheat from its reserves to wholesale buyers, such as millers and biscuit manufacturers. This criticality also led to the blocking, in 2022, of wheat exports to rebuild depleted reserves, at a time when the world was looking to the Indian market to make up for the blockade of Ukrainian exports. This decision strongly influenced the increase in wheat prices recorded in that period, as well as fuelling the problem of food security.
Although the country’s harvests are again flourishing with the 2024 season recording a record production of over 114 Mt, India has not yet rebuilt its reserves and is continuing with this strategy by asking global and domestic trading companies to avoid buying new season wheat from local farmers. (Open Photo: Wheat grains. 123rf)

Filippo Romeo

Since ancient times, food resources have played a decisive role in political dynamics both internally and externally. They constitute a key element on which the development and stability of states depend,
as well as, migratory flows and conflicts over the possession
and/or use of land and water.

These resources can also take on geopolitical connotations and, therefore, influence relations between states by playing a decisive role in the theatres of global competition, or be used as an element of “coercive diplomacy” in the event where one or more actors use them to influence the behaviour of others by limiting their access.
One of the emblematic cases in recent history is the strategy implemented by the US Administration, during the Reagan presidency, based on food supplies to increase US influence in Third World states. More specifically, this strategy consisted of artificially creating economic incentives for non-food agricultural production, such as cocoa, cotton and coffee, to make the “beneficiaries” dependent on food imports, to be able to influence their political processes.
For states exposed to the risk of poverty, access to food resources is comparable to the role that energy security and the supply of critical materials play for advanced states. In fact, price is also a decisive factor for them, given that high prices prevent accessibility by the poorest classes, which consequently leads to disorder and instability.

Agricultura machine harvesting crop in fields. Wheat plays a role of primary importance for global food security. 123rf

However, price is determined not only by meteorological factors, but also by political decisions, by the volatility of financial markets, by the price of hydrocarbons and phosphates, and last but not least by the impact of climate change. The market shock on global food prices, generated following the pandemic and the Russian-Ukrainian conflict, is emblematic of the period 2020, 2021 and 2022, the year in which peaks were reached. In subsequent periods, prices began to fall again. However, in the opinion of industry analysts, this price drop, also announced by the Food and Agriculture Organization (FAO) in 2024, could not herald stabilisation as long as the major players involved in war tensions continued to use resources as weapons.
Among food resources, wheat undoubtedly plays a role of primary importance for global food security, being one of the most traded raw materials in terms of value on an international scale, second only to soya. According to FAO statistics, just under one hundred countries in the world produce wheat and of these, only twenty-four manage to produce it to the value of more than a billion dollars.

Child in a field of wheat with the flag of Ukraine. Before the outbreak of the conflict, Ukraine was about to become the third-largest exporter in the world. 123rf

To date, the annual world production of wheat stands at around 700/750 Mt (million tons) and sees China in the lead with an annual production of around 137 Mt, followed by the European Union which, with its 134 Mt (in recent years European production has fluctuated between 125 and 140 Mt), undoubtedly plays a leading role with France, Romania and Germany at the top of the Union’s producing countries. Then there is India with 110 Mt, the Russian Federation with 75 Mt and the United States with 46 Mt. Not all producing countries are also exporters.In fact, China, despite being the largest producer globally, imports approximately 10 Mt of additional wheat every year, while the largest exporting countries include the Russian Federation, which in the 2022-2023 campaign, the period of the outbreak of hostilities with Ukraine, exported a record quantity of wheat, equal to over 45 Mt, followed by Canada, Australia and the United States with 17, 23 and 24 Mt respectively.Ukraine deserves special mention. Before the outbreak of the conflict, the Russian Federation was about to become the third-largest exporter in the world, while today, according to USDA (U.S. Department of Agriculture) data, it exports about 10 Mt.
The importance of the high demand for wheat on a global scale is given by the role of primary importance that cereal plays in human nutrition and, therefore, in the food industry, mainly engaged in the transformation of wheat into professional flour, which is one of the main destinations of cultivated wheat.

Wheat field. Geopolitical challenges have affected wheat production and flour availability. 123rf

The significant increase in demand for food products on a global scale has, as a result, determined the growth of the flour trade whose major producers are the United States, China, the European Union, India and Russia. The respective food industries of these countries produce, in fact, high-quality flour intended for a wide range of products, from bread making to the pasta industry. More specifically, soft wheat is used for the production of flour suitable for bread making and other baked products, while durum wheat is used for the production of pasta. Furthermore, durum wheat is widely used in regional cuisines in African and Middle Eastern countries.
However, geopolitical challenges such as trade tensions, climate change and national agricultural policies can significantly affect wheat production and flour availability. Therefore, today, in an increasingly interconnected world, the geopolitics of wheat plays a fundamental role in global food security and the economic prosperity of countries involved in producing and selling professional flour. (Open Photo: Wheat field. 123rf)
F.R.