Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Global Wheat Production Risks – 2024 By: Syndication Cloud June 04, 2024 at 16:08 PM EDT Photo from Unsplash Originally Posted On: https://cropgpt.ai/global-wheat-production-risks-2024/ Wheat Production Risks – 2024 Wheat, a vital staple food, supports nearly 40% of the global population by providing 20% of the world’s calories and protein. However, rising wheat prices threaten global food security and stability, as seen in past crises like the 2007/2008 surge that caused widespread hunger and the 2011 spike linked to the Arab Spring. In 2024, climate change and geopolitical conflicts further jeopardize wheat production, risking higher prices and instability. Wheat – Critical Crop Wheat is the staple food for nearly 40% of the planet, providing 20% of the world’s calories and proteins. However, the importance of wheat also results in its risk, Historically, spikes in wheat prices have driven millions into hunger and triggered social unrest. vIn 2007/2008, wheat prices surged, pushing an additional 200 million people into hunger. The trend continued in 2011, contributing to the Arab Spring, the UN attributing the rise in wheat prices to the start of the uprising. 2022 saw new all-time highs in pricing due to drought, flood, and conflict in Ukraine. The supply shortfall from Ukraine then led to a reshuffling of global wheat trade flows, with Russia exporting record amounts in 2022 to fill gaps in markets like Africa and the Middle East that traditionally relied on Ukrainian wheat. In 2024 conflict and, increasingly, climate change are the threats to the wheat supply and therefore world food prices and stability,. Key Threats to Wheat Production in 2024 Climate change is impacting global harvests, with India’s production potentially reduced by over 20% in the long term. In March 2024, countries are already running low on food. Lebanon and Egypt are struggling with soaring prices. In India, food inflation remains a critical issue, with food prices rising by 8.7% year-on-year as of April 2024. This is significant as food accounts for nearly 50% of India’s Consumer Price Index, compared to around 8% in the US, making the impact of food price increases much more pronounced in India Just six countries produce 60% of the entire global supply of wheat: China, Russia, India, the US, France, and Ukraine. T he global food supply, and therefore global stability, is closely linked to the harvests of these countries. All of these are facing challenges. France – Reduced Wheat Production France is the top producer of Wheat in the European Union, contributing about 4.3% to the global wheat supply, with a production of approximately 34.6 million metric tons Heavy rainfall has affected planting areas for winter wheat. The planted area for French soft wheat is projected to fall to its lowest level this millennium, primarily due to excessive rain undermining crop conditions. Nouvelle-Aquitaine Regions such as Nouvelle-Aquitaine, which have experienced severe rainfall, are particularly impacted, with some areas expecting a 29% reduction in planted areas compared to previous year. Pays de la Loire, Occitanie, and Provence Alpes-Côte d’Azur have all reported substantial reductions in planted areas due to heavy rainfall Wheat Blast Wheat blast, a fungal infection that thrives under warm and humid conditions could become a threat in France. At the moment the conditions that would drive wheat blast have only occurred area of France that are not major wheat areas, e.g. towards the Mediterranean. United States Wheat Production Risks US, which produces around 40 to 50 million tonnes of wheat a year, around 6.3% of global supply is struggling with increasing weather related challenges. In recent years U.S. wheat production has faced challenges from adverse weather conditions, shifts in planted area, and varying yields. In 2021 wheat production was around 44.9 million metric tons, slightly decreasing to 44.8 in 2022, and then increasing to an estimated 49.8 million metric tons in 2023. Certain regions have seen increases in wheat yields due to improved farming practices, better seed varieties, and favourable weather conditions in some years. For instance, investments in agricultural technology and precision farming have contributed to localized increases in yields. Conversely, other areas have faced yield reductions due to extreme weather events like droughts and heatwaves. The drought in the Great Plains, for example, has significantly impacted yields in major wheat-producing states such as Kansas and North Dakota Climate and Weather Conditions Persistent drought conditions and extreme weather events remain a significant threat to wheat production. While there has been a reduction in drought-affected areas, winter wheat conditions vary significantly, and weather changes could negatively impact crop yields as the season progresses. The previously unprecedented heat waves and droughts are becoming more likely in major U.S. wheat-producing regions like the Midwest. A 2021 study projects a 16.96% to 31.33% reduction in U.S. winter wheat production due to yield losses. Ukraine Conflict and Wheat Production rior to the war, Ukraine was one of the world’s top wheat exporters, producing over 86 million metric tons annually and accounting for 12% of global wheat exports in 2021. However, Ukraine’s wheat production has sharply declined since the Russian invasion. The unplanted area in 2022 due to the war was around 2.8 million hectares, nearly the size of Belgium. In 2022/23, Ukraine’s grain production dropped by 29% compared to 2021/22. The 2023/24, wheat production is projected to fall further to just 32 million tons. The ongoing war has severely disrupted and diminished Ukraine’s wheat production through several factors Shortage of Labour, Logistics and Inputs Due to the war, there is a significant shortage of labour and essential inputs like fuel and fertilizers, severely impacting Ukraine’s ability to plant and harvest wheat crops. The Russian naval blockade of Ukraine’s Black Sea ports has strangled Ukraine’s ability to export its wheat production. Destruction of Infrastructure Farming equipment, infrastructure (irrigation systems, grain elevators, port terminals), and croplands have been destroyed by Russian bombing, missile strikes, and burning of fields in key wheat-growing regions like Donetsk, Mykolaiv, and Kherson. Ukrainian agricultural machinery, grain stocks and harvested wheat have been damaged or stolen by Russian forces. India – Wheat Reserves Depleted India is a giant producer of wheat. It grows just over 105 million tonnes a year, around 13% of the global supply – this is second only to China. The increasing heat, record high temperatures, and decreasing monsoons is threatening this scale of production, and India already has with dwindling reserves. Climate Change and Extreme Weather 2022 was particularly severe, with temperatures reaching unprecedented levels in some regions. In March 2022, New Delhi recorded temperatures soaring above 40°C (104°F), which was one of the earliest instances of such extreme heat in the season. This heatwave extended into April and May, affecting large sections of northern and central India. The intense heat exacerbated drought conditions, reduced crop yields, and strained water resources . Wheat production, was hit hard, with heat stress leading to a significant drop in yields. Heatwaves in 2024, similar to 2022, would seriously affect wheat production. As 2024 is an El Nino year, this has additional impacts. The strengthening of El Niño is expected to bring below-normal monsoon rains, reducing soil moisture levels and affecting wheat growth. Water Scarcity Below-par monsoon rains have already led to low soil moisture levels in key wheat-producing states like Uttar Pradesh, Madhya Pradesh, and Rajasthan. This water scarcity forces farmers to switch to less water-intensive crops, reducing the area under wheat cultivation as well as limiting the yields of wheat that is planted. Low Government Reserves Wheat inventories in government warehouses have fallen to their lowest levels in several years. This reduction in reserves limits the government’s ability to stabilize prices and ensure adequate supply through buffer stock releases. The government aims to procure large quantities of wheat to replenish its reserves, but competition with private traders is complicating this and results in a more volatile market and reduced food security. China – Wheat Production Risks China is the single largest wheat producer in the world – approximately 17.5% of the world’s total wheat production, with an estimated output of 140 million metric tons. China, like other countries is facing climate risks. Climate Change and Extreme Weather Droughts and Heatwaves: Climate change has increased the frequency and severity of extreme weather events such as droughts and heatwaves, which can significantly impact wheat yields. Prolonged dry periods reduce soil moisture, critical for wheat growth, while heatwaves can damage crops during critical growth stages Pest and Disease Outbreak Wheat Blast: This fungal disease, caused by Magnaporthe oryzae pathotype Triticum, has the potential to devastate wheat crops. It spreads rapidly under warm and humid conditions, which are becoming more common due to climate change Other Fungal Diseases: Diseases such as rusts and mildews, exacerbated by changing climate conditions, pose ongoing threats to wheat production in China. Water Scarcity Irrigation Issues: China’s northern wheat-growing regions rely heavily on irrigation. Water scarcity, driven by over-extraction of groundwater and changing precipitation patterns, can limit the availability of water for irrigation, thereby affecting wheat yields. Soil Degradation Intensive farming practices in China have led to soil erosion and nutrient depletion, reducing the land’s productivity over time, further threatening yields. Russia Wheat Production Russia, produces around 11% of the global wheat, 88 million tonnes, which is similar to Ukraine pre-war wheat production. It had a very positive harvest in 2023, but the risks for 2024 remain. Heatwaves and Droughts Russia is at risk of experiencing extreme weather events, including heatwaves and droughts, would impact wheat yields. Past droughts in 2010 and 2021 significantly reduced crop output. Western Sanctions The Ukraine conflict is resulting in economic sanctions on Russia that can hinder access to essential agricultural inputs such as high-quality seeds, fertilizers, and advanced farming equipment. These restrictions can reduce agricultural productivity and increase costs for Russian farmers. Russia has appeared to avoid many sanctions and is trading with many countries, but the longer term impacts on Russian yields are not yet fully understood. Additional Global Wheat Challenges 2024 As well as the major producers of wheat suffering risk, other countries have growing risks. Europe Wheat across Europe is threatened by the fungal disease Septoria tritici blotch (STB), especially in the UK. It is costing UK growers around €240 million per year in yield losses. The poor weather, especially in the UK has impacted planting and could also reduce yield Bangladesh Wheat crops have suffered up to 50% yield losses from the emerging “wheat blast” disease caused by a fungus. Ethiopia Wheat crops are threatened by wheat rust diseases like stem rust (Ug99 strain), requiring forecasting models to enable timely preventative action for up to 500,000 smallholder farmers. Historical Context and Wheat Price Volatility Wheat prices have experienced significant volatility in the past, with major changes since 2021 2021: Wheat prices were relatively stable, averaging around $7 per bushel throughout the year. The food price index data specific to 2021 is not provided, but historically, food prices increased at similar rates to those seen between the 1970s and early 2000s. 2022: Wheat prices spiked sharply in early 2022 after Russia’s invasion of Ukraine in late February disrupted global wheat supplies and trade flows. Prices surged to unprecedented levels above $12 per bushel in March 2022 amid uncertainty over Black Sea wheat shipments. This disruption also caused a significant increase in the food price index during 2022. 2023: After the initial spike, wheat prices gradually declined from the record highs but remained elevated compared to pre-war levels. The average price in 2023 was around $7.23 per bushel. Factors keeping prices high included continued supply disruptions from the Russia-Ukraine war despite the Black Sea grain deal, drought conditions reducing wheat yields in major producers like Canada and Australia, and high input costs for fertilizers and energy impacting production costs. Food inflation remained high throughout 2023 but started to ease, with the UK reporting food inflation at 7% (CPIH) as of February 2024. 2024 (year-to-date): So far in 2024, wheat prices have trended lower but remain historically high at around $6.29 per bushel on average. Key factors influencing prices include ample wheat stocks from Russia and record Black Sea exports weighing on global prices, the war risk premium eroding as markets revert to pre-war pricing trends, and concerns over tightening global wheat supplies and stocks-to-use ratios providing some support. The FAO Food Price Index stood at 119.1 points in April 2024, up 0.3% from March but down 10.5% from its value a year earlier in April 2023. In the US, overall food prices are predicted to increase by 2.2% in 2024, with food-at-home prices up 1.2% and food-away-from-home prices up 4.2%. In the UK, food inflation eased to 2.9% (CPIH) as of April 2024, though food prices remain significantly higher than two years ago. The Fragile Balance of Food Security Increases in food prices result in political instability and risks to national security. Food shortages are linked to riots and uprisings. A chart from the UN illustrates the link between grain prices and civil disorder, with the Arab Spring being a notable example. Food security is a delicate balance, easily disrupted by political instability and civil disorder. The UNCTAD’s 2022 report underscores this relationship, illustrating how fluctuations in food prices can trigger social unrest. The global food supply is also highly vulnerable to climate change, which can alter rainfall patterns, reduce crop yields, and devastate farmlands. As these conditions for instability grow, the risk of democratic breakdowns, civil conflict, protests, and rioting increases. Historically, rising food prices have driven unrest. The 2007-2008 food crisis saw prices nearly double, sparking food riots across Africa, Asia, and the Caribbean. Extreme weather reduced harvests across multiple continents between 2010 and 2011, driving grain and crop prices up by 70%, leading to the Arab Spring. In Syria, uprisings began after concurrent droughts compounded rising prices, and in Egypt, protestors chanted “bread, freedom, social justice.” In 2022, the Food Price Index peaked at an unprecedented 157.9. These statistics have already had significant consequences for geopolitical stability. On July 9, amid years of heavy loans and an 80% rise in food prices, Sri Lankan citizens stormed President Rajapaksa’s palace. This revolution echoes the 2010 Tunisian uprising, with more potential flashpoints on the horizon. 2024 is proving to be another challenging year for wheat, with emerging threats compounding existing issues. Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Global Wheat Production Risks – 2024 By: Syndication Cloud June 04, 2024 at 16:08 PM EDT Photo from Unsplash Originally Posted On: https://cropgpt.ai/global-wheat-production-risks-2024/ Wheat Production Risks – 2024 Wheat, a vital staple food, supports nearly 40% of the global population by providing 20% of the world’s calories and protein. However, rising wheat prices threaten global food security and stability, as seen in past crises like the 2007/2008 surge that caused widespread hunger and the 2011 spike linked to the Arab Spring. In 2024, climate change and geopolitical conflicts further jeopardize wheat production, risking higher prices and instability. Wheat – Critical Crop Wheat is the staple food for nearly 40% of the planet, providing 20% of the world’s calories and proteins. However, the importance of wheat also results in its risk, Historically, spikes in wheat prices have driven millions into hunger and triggered social unrest. vIn 2007/2008, wheat prices surged, pushing an additional 200 million people into hunger. The trend continued in 2011, contributing to the Arab Spring, the UN attributing the rise in wheat prices to the start of the uprising. 2022 saw new all-time highs in pricing due to drought, flood, and conflict in Ukraine. The supply shortfall from Ukraine then led to a reshuffling of global wheat trade flows, with Russia exporting record amounts in 2022 to fill gaps in markets like Africa and the Middle East that traditionally relied on Ukrainian wheat. In 2024 conflict and, increasingly, climate change are the threats to the wheat supply and therefore world food prices and stability,. Key Threats to Wheat Production in 2024 Climate change is impacting global harvests, with India’s production potentially reduced by over 20% in the long term. In March 2024, countries are already running low on food. Lebanon and Egypt are struggling with soaring prices. In India, food inflation remains a critical issue, with food prices rising by 8.7% year-on-year as of April 2024. This is significant as food accounts for nearly 50% of India’s Consumer Price Index, compared to around 8% in the US, making the impact of food price increases much more pronounced in India Just six countries produce 60% of the entire global supply of wheat: China, Russia, India, the US, France, and Ukraine. T he global food supply, and therefore global stability, is closely linked to the harvests of these countries. All of these are facing challenges. France – Reduced Wheat Production France is the top producer of Wheat in the European Union, contributing about 4.3% to the global wheat supply, with a production of approximately 34.6 million metric tons Heavy rainfall has affected planting areas for winter wheat. The planted area for French soft wheat is projected to fall to its lowest level this millennium, primarily due to excessive rain undermining crop conditions. Nouvelle-Aquitaine Regions such as Nouvelle-Aquitaine, which have experienced severe rainfall, are particularly impacted, with some areas expecting a 29% reduction in planted areas compared to previous year. Pays de la Loire, Occitanie, and Provence Alpes-Côte d’Azur have all reported substantial reductions in planted areas due to heavy rainfall Wheat Blast Wheat blast, a fungal infection that thrives under warm and humid conditions could become a threat in France. At the moment the conditions that would drive wheat blast have only occurred area of France that are not major wheat areas, e.g. towards the Mediterranean. United States Wheat Production Risks US, which produces around 40 to 50 million tonnes of wheat a year, around 6.3% of global supply is struggling with increasing weather related challenges. In recent years U.S. wheat production has faced challenges from adverse weather conditions, shifts in planted area, and varying yields. In 2021 wheat production was around 44.9 million metric tons, slightly decreasing to 44.8 in 2022, and then increasing to an estimated 49.8 million metric tons in 2023. Certain regions have seen increases in wheat yields due to improved farming practices, better seed varieties, and favourable weather conditions in some years. For instance, investments in agricultural technology and precision farming have contributed to localized increases in yields. Conversely, other areas have faced yield reductions due to extreme weather events like droughts and heatwaves. The drought in the Great Plains, for example, has significantly impacted yields in major wheat-producing states such as Kansas and North Dakota Climate and Weather Conditions Persistent drought conditions and extreme weather events remain a significant threat to wheat production. While there has been a reduction in drought-affected areas, winter wheat conditions vary significantly, and weather changes could negatively impact crop yields as the season progresses. The previously unprecedented heat waves and droughts are becoming more likely in major U.S. wheat-producing regions like the Midwest. A 2021 study projects a 16.96% to 31.33% reduction in U.S. winter wheat production due to yield losses. Ukraine Conflict and Wheat Production rior to the war, Ukraine was one of the world’s top wheat exporters, producing over 86 million metric tons annually and accounting for 12% of global wheat exports in 2021. However, Ukraine’s wheat production has sharply declined since the Russian invasion. The unplanted area in 2022 due to the war was around 2.8 million hectares, nearly the size of Belgium. In 2022/23, Ukraine’s grain production dropped by 29% compared to 2021/22. The 2023/24, wheat production is projected to fall further to just 32 million tons. The ongoing war has severely disrupted and diminished Ukraine’s wheat production through several factors Shortage of Labour, Logistics and Inputs Due to the war, there is a significant shortage of labour and essential inputs like fuel and fertilizers, severely impacting Ukraine’s ability to plant and harvest wheat crops. The Russian naval blockade of Ukraine’s Black Sea ports has strangled Ukraine’s ability to export its wheat production. Destruction of Infrastructure Farming equipment, infrastructure (irrigation systems, grain elevators, port terminals), and croplands have been destroyed by Russian bombing, missile strikes, and burning of fields in key wheat-growing regions like Donetsk, Mykolaiv, and Kherson. Ukrainian agricultural machinery, grain stocks and harvested wheat have been damaged or stolen by Russian forces. India – Wheat Reserves Depleted India is a giant producer of wheat. It grows just over 105 million tonnes a year, around 13% of the global supply – this is second only to China. The increasing heat, record high temperatures, and decreasing monsoons is threatening this scale of production, and India already has with dwindling reserves. Climate Change and Extreme Weather 2022 was particularly severe, with temperatures reaching unprecedented levels in some regions. In March 2022, New Delhi recorded temperatures soaring above 40°C (104°F), which was one of the earliest instances of such extreme heat in the season. This heatwave extended into April and May, affecting large sections of northern and central India. The intense heat exacerbated drought conditions, reduced crop yields, and strained water resources . Wheat production, was hit hard, with heat stress leading to a significant drop in yields. Heatwaves in 2024, similar to 2022, would seriously affect wheat production. As 2024 is an El Nino year, this has additional impacts. The strengthening of El Niño is expected to bring below-normal monsoon rains, reducing soil moisture levels and affecting wheat growth. Water Scarcity Below-par monsoon rains have already led to low soil moisture levels in key wheat-producing states like Uttar Pradesh, Madhya Pradesh, and Rajasthan. This water scarcity forces farmers to switch to less water-intensive crops, reducing the area under wheat cultivation as well as limiting the yields of wheat that is planted. Low Government Reserves Wheat inventories in government warehouses have fallen to their lowest levels in several years. This reduction in reserves limits the government’s ability to stabilize prices and ensure adequate supply through buffer stock releases. The government aims to procure large quantities of wheat to replenish its reserves, but competition with private traders is complicating this and results in a more volatile market and reduced food security. China – Wheat Production Risks China is the single largest wheat producer in the world – approximately 17.5% of the world’s total wheat production, with an estimated output of 140 million metric tons. China, like other countries is facing climate risks. Climate Change and Extreme Weather Droughts and Heatwaves: Climate change has increased the frequency and severity of extreme weather events such as droughts and heatwaves, which can significantly impact wheat yields. Prolonged dry periods reduce soil moisture, critical for wheat growth, while heatwaves can damage crops during critical growth stages Pest and Disease Outbreak Wheat Blast: This fungal disease, caused by Magnaporthe oryzae pathotype Triticum, has the potential to devastate wheat crops. It spreads rapidly under warm and humid conditions, which are becoming more common due to climate change Other Fungal Diseases: Diseases such as rusts and mildews, exacerbated by changing climate conditions, pose ongoing threats to wheat production in China. Water Scarcity Irrigation Issues: China’s northern wheat-growing regions rely heavily on irrigation. Water scarcity, driven by over-extraction of groundwater and changing precipitation patterns, can limit the availability of water for irrigation, thereby affecting wheat yields. Soil Degradation Intensive farming practices in China have led to soil erosion and nutrient depletion, reducing the land’s productivity over time, further threatening yields. Russia Wheat Production Russia, produces around 11% of the global wheat, 88 million tonnes, which is similar to Ukraine pre-war wheat production. It had a very positive harvest in 2023, but the risks for 2024 remain. Heatwaves and Droughts Russia is at risk of experiencing extreme weather events, including heatwaves and droughts, would impact wheat yields. Past droughts in 2010 and 2021 significantly reduced crop output. Western Sanctions The Ukraine conflict is resulting in economic sanctions on Russia that can hinder access to essential agricultural inputs such as high-quality seeds, fertilizers, and advanced farming equipment. These restrictions can reduce agricultural productivity and increase costs for Russian farmers. Russia has appeared to avoid many sanctions and is trading with many countries, but the longer term impacts on Russian yields are not yet fully understood. Additional Global Wheat Challenges 2024 As well as the major producers of wheat suffering risk, other countries have growing risks. Europe Wheat across Europe is threatened by the fungal disease Septoria tritici blotch (STB), especially in the UK. It is costing UK growers around €240 million per year in yield losses. The poor weather, especially in the UK has impacted planting and could also reduce yield Bangladesh Wheat crops have suffered up to 50% yield losses from the emerging “wheat blast” disease caused by a fungus. Ethiopia Wheat crops are threatened by wheat rust diseases like stem rust (Ug99 strain), requiring forecasting models to enable timely preventative action for up to 500,000 smallholder farmers. Historical Context and Wheat Price Volatility Wheat prices have experienced significant volatility in the past, with major changes since 2021 2021: Wheat prices were relatively stable, averaging around $7 per bushel throughout the year. The food price index data specific to 2021 is not provided, but historically, food prices increased at similar rates to those seen between the 1970s and early 2000s. 2022: Wheat prices spiked sharply in early 2022 after Russia’s invasion of Ukraine in late February disrupted global wheat supplies and trade flows. Prices surged to unprecedented levels above $12 per bushel in March 2022 amid uncertainty over Black Sea wheat shipments. This disruption also caused a significant increase in the food price index during 2022. 2023: After the initial spike, wheat prices gradually declined from the record highs but remained elevated compared to pre-war levels. The average price in 2023 was around $7.23 per bushel. Factors keeping prices high included continued supply disruptions from the Russia-Ukraine war despite the Black Sea grain deal, drought conditions reducing wheat yields in major producers like Canada and Australia, and high input costs for fertilizers and energy impacting production costs. Food inflation remained high throughout 2023 but started to ease, with the UK reporting food inflation at 7% (CPIH) as of February 2024. 2024 (year-to-date): So far in 2024, wheat prices have trended lower but remain historically high at around $6.29 per bushel on average. Key factors influencing prices include ample wheat stocks from Russia and record Black Sea exports weighing on global prices, the war risk premium eroding as markets revert to pre-war pricing trends, and concerns over tightening global wheat supplies and stocks-to-use ratios providing some support. The FAO Food Price Index stood at 119.1 points in April 2024, up 0.3% from March but down 10.5% from its value a year earlier in April 2023. In the US, overall food prices are predicted to increase by 2.2% in 2024, with food-at-home prices up 1.2% and food-away-from-home prices up 4.2%. In the UK, food inflation eased to 2.9% (CPIH) as of April 2024, though food prices remain significantly higher than two years ago. The Fragile Balance of Food Security Increases in food prices result in political instability and risks to national security. Food shortages are linked to riots and uprisings. A chart from the UN illustrates the link between grain prices and civil disorder, with the Arab Spring being a notable example. Food security is a delicate balance, easily disrupted by political instability and civil disorder. The UNCTAD’s 2022 report underscores this relationship, illustrating how fluctuations in food prices can trigger social unrest. The global food supply is also highly vulnerable to climate change, which can alter rainfall patterns, reduce crop yields, and devastate farmlands. As these conditions for instability grow, the risk of democratic breakdowns, civil conflict, protests, and rioting increases. Historically, rising food prices have driven unrest. The 2007-2008 food crisis saw prices nearly double, sparking food riots across Africa, Asia, and the Caribbean. Extreme weather reduced harvests across multiple continents between 2010 and 2011, driving grain and crop prices up by 70%, leading to the Arab Spring. In Syria, uprisings began after concurrent droughts compounded rising prices, and in Egypt, protestors chanted “bread, freedom, social justice.” In 2022, the Food Price Index peaked at an unprecedented 157.9. These statistics have already had significant consequences for geopolitical stability. On July 9, amid years of heavy loans and an 80% rise in food prices, Sri Lankan citizens stormed President Rajapaksa’s palace. This revolution echoes the 2010 Tunisian uprising, with more potential flashpoints on the horizon. 2024 is proving to be another challenging year for wheat, with emerging threats compounding existing issues.
Photo from Unsplash Originally Posted On: https://cropgpt.ai/global-wheat-production-risks-2024/ Wheat Production Risks – 2024 Wheat, a vital staple food, supports nearly 40% of the global population by providing 20% of the world’s calories and protein. However, rising wheat prices threaten global food security and stability, as seen in past crises like the 2007/2008 surge that caused widespread hunger and the 2011 spike linked to the Arab Spring. In 2024, climate change and geopolitical conflicts further jeopardize wheat production, risking higher prices and instability. Wheat – Critical Crop Wheat is the staple food for nearly 40% of the planet, providing 20% of the world’s calories and proteins. However, the importance of wheat also results in its risk, Historically, spikes in wheat prices have driven millions into hunger and triggered social unrest. vIn 2007/2008, wheat prices surged, pushing an additional 200 million people into hunger. The trend continued in 2011, contributing to the Arab Spring, the UN attributing the rise in wheat prices to the start of the uprising. 2022 saw new all-time highs in pricing due to drought, flood, and conflict in Ukraine. The supply shortfall from Ukraine then led to a reshuffling of global wheat trade flows, with Russia exporting record amounts in 2022 to fill gaps in markets like Africa and the Middle East that traditionally relied on Ukrainian wheat. In 2024 conflict and, increasingly, climate change are the threats to the wheat supply and therefore world food prices and stability,. Key Threats to Wheat Production in 2024 Climate change is impacting global harvests, with India’s production potentially reduced by over 20% in the long term. In March 2024, countries are already running low on food. Lebanon and Egypt are struggling with soaring prices. In India, food inflation remains a critical issue, with food prices rising by 8.7% year-on-year as of April 2024. This is significant as food accounts for nearly 50% of India’s Consumer Price Index, compared to around 8% in the US, making the impact of food price increases much more pronounced in India Just six countries produce 60% of the entire global supply of wheat: China, Russia, India, the US, France, and Ukraine. T he global food supply, and therefore global stability, is closely linked to the harvests of these countries. All of these are facing challenges. France – Reduced Wheat Production France is the top producer of Wheat in the European Union, contributing about 4.3% to the global wheat supply, with a production of approximately 34.6 million metric tons Heavy rainfall has affected planting areas for winter wheat. The planted area for French soft wheat is projected to fall to its lowest level this millennium, primarily due to excessive rain undermining crop conditions. Nouvelle-Aquitaine Regions such as Nouvelle-Aquitaine, which have experienced severe rainfall, are particularly impacted, with some areas expecting a 29% reduction in planted areas compared to previous year. Pays de la Loire, Occitanie, and Provence Alpes-Côte d’Azur have all reported substantial reductions in planted areas due to heavy rainfall Wheat Blast Wheat blast, a fungal infection that thrives under warm and humid conditions could become a threat in France. At the moment the conditions that would drive wheat blast have only occurred area of France that are not major wheat areas, e.g. towards the Mediterranean. United States Wheat Production Risks US, which produces around 40 to 50 million tonnes of wheat a year, around 6.3% of global supply is struggling with increasing weather related challenges. In recent years U.S. wheat production has faced challenges from adverse weather conditions, shifts in planted area, and varying yields. In 2021 wheat production was around 44.9 million metric tons, slightly decreasing to 44.8 in 2022, and then increasing to an estimated 49.8 million metric tons in 2023. Certain regions have seen increases in wheat yields due to improved farming practices, better seed varieties, and favourable weather conditions in some years. For instance, investments in agricultural technology and precision farming have contributed to localized increases in yields. Conversely, other areas have faced yield reductions due to extreme weather events like droughts and heatwaves. The drought in the Great Plains, for example, has significantly impacted yields in major wheat-producing states such as Kansas and North Dakota Climate and Weather Conditions Persistent drought conditions and extreme weather events remain a significant threat to wheat production. While there has been a reduction in drought-affected areas, winter wheat conditions vary significantly, and weather changes could negatively impact crop yields as the season progresses. The previously unprecedented heat waves and droughts are becoming more likely in major U.S. wheat-producing regions like the Midwest. A 2021 study projects a 16.96% to 31.33% reduction in U.S. winter wheat production due to yield losses. Ukraine Conflict and Wheat Production rior to the war, Ukraine was one of the world’s top wheat exporters, producing over 86 million metric tons annually and accounting for 12% of global wheat exports in 2021. However, Ukraine’s wheat production has sharply declined since the Russian invasion. The unplanted area in 2022 due to the war was around 2.8 million hectares, nearly the size of Belgium. In 2022/23, Ukraine’s grain production dropped by 29% compared to 2021/22. The 2023/24, wheat production is projected to fall further to just 32 million tons. The ongoing war has severely disrupted and diminished Ukraine’s wheat production through several factors Shortage of Labour, Logistics and Inputs Due to the war, there is a significant shortage of labour and essential inputs like fuel and fertilizers, severely impacting Ukraine’s ability to plant and harvest wheat crops. The Russian naval blockade of Ukraine’s Black Sea ports has strangled Ukraine’s ability to export its wheat production. Destruction of Infrastructure Farming equipment, infrastructure (irrigation systems, grain elevators, port terminals), and croplands have been destroyed by Russian bombing, missile strikes, and burning of fields in key wheat-growing regions like Donetsk, Mykolaiv, and Kherson. Ukrainian agricultural machinery, grain stocks and harvested wheat have been damaged or stolen by Russian forces. India – Wheat Reserves Depleted India is a giant producer of wheat. It grows just over 105 million tonnes a year, around 13% of the global supply – this is second only to China. The increasing heat, record high temperatures, and decreasing monsoons is threatening this scale of production, and India already has with dwindling reserves. Climate Change and Extreme Weather 2022 was particularly severe, with temperatures reaching unprecedented levels in some regions. In March 2022, New Delhi recorded temperatures soaring above 40°C (104°F), which was one of the earliest instances of such extreme heat in the season. This heatwave extended into April and May, affecting large sections of northern and central India. The intense heat exacerbated drought conditions, reduced crop yields, and strained water resources . Wheat production, was hit hard, with heat stress leading to a significant drop in yields. Heatwaves in 2024, similar to 2022, would seriously affect wheat production. As 2024 is an El Nino year, this has additional impacts. The strengthening of El Niño is expected to bring below-normal monsoon rains, reducing soil moisture levels and affecting wheat growth. Water Scarcity Below-par monsoon rains have already led to low soil moisture levels in key wheat-producing states like Uttar Pradesh, Madhya Pradesh, and Rajasthan. This water scarcity forces farmers to switch to less water-intensive crops, reducing the area under wheat cultivation as well as limiting the yields of wheat that is planted. Low Government Reserves Wheat inventories in government warehouses have fallen to their lowest levels in several years. This reduction in reserves limits the government’s ability to stabilize prices and ensure adequate supply through buffer stock releases. The government aims to procure large quantities of wheat to replenish its reserves, but competition with private traders is complicating this and results in a more volatile market and reduced food security. China – Wheat Production Risks China is the single largest wheat producer in the world – approximately 17.5% of the world’s total wheat production, with an estimated output of 140 million metric tons. China, like other countries is facing climate risks. Climate Change and Extreme Weather Droughts and Heatwaves: Climate change has increased the frequency and severity of extreme weather events such as droughts and heatwaves, which can significantly impact wheat yields. Prolonged dry periods reduce soil moisture, critical for wheat growth, while heatwaves can damage crops during critical growth stages Pest and Disease Outbreak Wheat Blast: This fungal disease, caused by Magnaporthe oryzae pathotype Triticum, has the potential to devastate wheat crops. It spreads rapidly under warm and humid conditions, which are becoming more common due to climate change Other Fungal Diseases: Diseases such as rusts and mildews, exacerbated by changing climate conditions, pose ongoing threats to wheat production in China. Water Scarcity Irrigation Issues: China’s northern wheat-growing regions rely heavily on irrigation. Water scarcity, driven by over-extraction of groundwater and changing precipitation patterns, can limit the availability of water for irrigation, thereby affecting wheat yields. Soil Degradation Intensive farming practices in China have led to soil erosion and nutrient depletion, reducing the land’s productivity over time, further threatening yields. Russia Wheat Production Russia, produces around 11% of the global wheat, 88 million tonnes, which is similar to Ukraine pre-war wheat production. It had a very positive harvest in 2023, but the risks for 2024 remain. Heatwaves and Droughts Russia is at risk of experiencing extreme weather events, including heatwaves and droughts, would impact wheat yields. Past droughts in 2010 and 2021 significantly reduced crop output. Western Sanctions The Ukraine conflict is resulting in economic sanctions on Russia that can hinder access to essential agricultural inputs such as high-quality seeds, fertilizers, and advanced farming equipment. These restrictions can reduce agricultural productivity and increase costs for Russian farmers. Russia has appeared to avoid many sanctions and is trading with many countries, but the longer term impacts on Russian yields are not yet fully understood. Additional Global Wheat Challenges 2024 As well as the major producers of wheat suffering risk, other countries have growing risks. Europe Wheat across Europe is threatened by the fungal disease Septoria tritici blotch (STB), especially in the UK. It is costing UK growers around €240 million per year in yield losses. The poor weather, especially in the UK has impacted planting and could also reduce yield Bangladesh Wheat crops have suffered up to 50% yield losses from the emerging “wheat blast” disease caused by a fungus. Ethiopia Wheat crops are threatened by wheat rust diseases like stem rust (Ug99 strain), requiring forecasting models to enable timely preventative action for up to 500,000 smallholder farmers. Historical Context and Wheat Price Volatility Wheat prices have experienced significant volatility in the past, with major changes since 2021 2021: Wheat prices were relatively stable, averaging around $7 per bushel throughout the year. The food price index data specific to 2021 is not provided, but historically, food prices increased at similar rates to those seen between the 1970s and early 2000s. 2022: Wheat prices spiked sharply in early 2022 after Russia’s invasion of Ukraine in late February disrupted global wheat supplies and trade flows. Prices surged to unprecedented levels above $12 per bushel in March 2022 amid uncertainty over Black Sea wheat shipments. This disruption also caused a significant increase in the food price index during 2022. 2023: After the initial spike, wheat prices gradually declined from the record highs but remained elevated compared to pre-war levels. The average price in 2023 was around $7.23 per bushel. Factors keeping prices high included continued supply disruptions from the Russia-Ukraine war despite the Black Sea grain deal, drought conditions reducing wheat yields in major producers like Canada and Australia, and high input costs for fertilizers and energy impacting production costs. Food inflation remained high throughout 2023 but started to ease, with the UK reporting food inflation at 7% (CPIH) as of February 2024. 2024 (year-to-date): So far in 2024, wheat prices have trended lower but remain historically high at around $6.29 per bushel on average. Key factors influencing prices include ample wheat stocks from Russia and record Black Sea exports weighing on global prices, the war risk premium eroding as markets revert to pre-war pricing trends, and concerns over tightening global wheat supplies and stocks-to-use ratios providing some support. The FAO Food Price Index stood at 119.1 points in April 2024, up 0.3% from March but down 10.5% from its value a year earlier in April 2023. In the US, overall food prices are predicted to increase by 2.2% in 2024, with food-at-home prices up 1.2% and food-away-from-home prices up 4.2%. In the UK, food inflation eased to 2.9% (CPIH) as of April 2024, though food prices remain significantly higher than two years ago. The Fragile Balance of Food Security Increases in food prices result in political instability and risks to national security. Food shortages are linked to riots and uprisings. A chart from the UN illustrates the link between grain prices and civil disorder, with the Arab Spring being a notable example. Food security is a delicate balance, easily disrupted by political instability and civil disorder. The UNCTAD’s 2022 report underscores this relationship, illustrating how fluctuations in food prices can trigger social unrest. The global food supply is also highly vulnerable to climate change, which can alter rainfall patterns, reduce crop yields, and devastate farmlands. As these conditions for instability grow, the risk of democratic breakdowns, civil conflict, protests, and rioting increases. Historically, rising food prices have driven unrest. The 2007-2008 food crisis saw prices nearly double, sparking food riots across Africa, Asia, and the Caribbean. Extreme weather reduced harvests across multiple continents between 2010 and 2011, driving grain and crop prices up by 70%, leading to the Arab Spring. In Syria, uprisings began after concurrent droughts compounded rising prices, and in Egypt, protestors chanted “bread, freedom, social justice.” In 2022, the Food Price Index peaked at an unprecedented 157.9. These statistics have already had significant consequences for geopolitical stability. On July 9, amid years of heavy loans and an 80% rise in food prices, Sri Lankan citizens stormed President Rajapaksa’s palace. This revolution echoes the 2010 Tunisian uprising, with more potential flashpoints on the horizon. 2024 is proving to be another challenging year for wheat, with emerging threats compounding existing issues.
