Global Wheat Imports Expected to Decline

By Naveen Thukral and Mohamed Ezz
SINGAPORE/CAIRO (Reuters) – Global wheat imports are likely to drop this year as slowing economic growth among top buyers, a stronger dollar, and higher local cereal output curb grain buying, putting pressure on prices despite world inventories headed for nine-year lows.

Slower purchasing by top importers could cap grain prices, offsetting concerns that unfavorable weather in the Black Sea region, India, and the United States will curtail output. Lower Chinese intake will hurt Australian farmers, who relied on China’s demand after harvesting a near-record crop.

Top importer China is expected to buy less than half of last year’s volume in the first six months of 2025, while demand in Indonesia and Egypt is likely to slow as well, say millers, traders, and analysts.

Higher Chinese wheat output and increased rice production in Indonesia will limit shipments. A larger crop in Iraq is expected to affect one of the Middle East’s largest buyers.

Dennis Voznesenski, an analyst at Commonwealth Bank in Sydney, noted, “One structural market factor that may be softening demand longer term is increasing production in key import markets, like China.”

China’s wheat output is forecast to rise by 2.6% for the year ending June 2025, according to estimates from the U.S. Department of Agriculture (USDA). The USDA also predicts a 37% drop in imports during this period, citing estimates from the China National Grains and Oils Information Center.

The volatile geopolitical environment, including real and trade wars, is prompting countries to ramp up domestic production and reduce reliance on global supply chains.

Declining imports are coinciding with tightening global stockpiles, with the USDA expecting inventories to fall to their lowest levels in nine years by the end of June.

Wheat consumption may also decline in major importing countries due to slowing economic growth, with China’s economy expected to face challenges in 2025, and stagnant growth in Indonesia and lower GDP growth in Egypt.

Foreign wheat import costs have either risen or remained steady despite international prices hitting a four-year low in 2024 due to declines in many emerging market currencies against the dollar.

The Chinese yuan has weakened amid the U.S.-China trade dispute, and both the Indonesian rupiah and Egyptian pound are near all-time lows against the dollar.

Chinese Delays

China recently postponed imports of up to 600,000 metric tons, leading traders to expect declining purchases in coming months.

Darin Friedrichs, co-founder of Shanghai-based Sitonia Consulting, expressed a bearish outlook on Chinese wheat demand for the next six months, stating that, “The 2024 (Chinese) crop had nearly perfect weather, production broke records, and the quality was very good. There isn’t much need for imports.”

Chinese importers have booked around 1 million tons for March arrival, significantly down from recent years when sales were double or triple that volume at the same time, according to Rod Baker, an analyst at Australian Crop Forecasters.

Rival Asian importers are also cutting back on purchases. Indonesia’s rice output is projected to rebound this year after El Nino weather affected last year’s crop. The government estimates production will increase to 32.8 million tons from 30.62 million tons in 2024. This increase is prompting food processors to switch back to locally produced rice flour from imported wheat.

The struggling rupiah is crimping wheat purchases, according to an unidentified senior executive at the Indonesian Wheat Flour Producers Association.

Egypt’s wheat purchases are also likely to decline this year. State-grain buyer Mostakbal Misr purchased 1.267 million tons at the end of December, sufficient to last until June. However, it also procured an additional 250,000 tons in January.

In 2024, Egypt imported about 14.7 million tons of wheat, according to trade data reviewed by Reuters. A German grains trader noted, “The big importer Egypt is suffering from serious economic problems with growth low and the country needing finance from Arab donors to help it with wheat purchases.”

Lastly, major Middle Eastern buyer Iraq indicated it would halt wheat imports for its subsidy program due to a 1.5-million-ton crop surplus from a bumper harvest.