Recovery projected for global flour exports in 2013-14

July 12, 2013

LONDON — World trade in wheat flour, as projected by the International Grains Council, will increase by 7% in the 2013-14 crop year. That represents a partial recovery from the 16% drop in the year ending this June 30, and would bring global flour exports to the second largest total of record.

The I.G.C. projected global flour trade in 2013-14 at 13,060,000 tonnes of grain equivalent (209 million cwts in terms of flour), compared with the revised estimate of 12,220,000 for 2012-13 and the all-time record of 14,560,000 tonnes in 2011-12. It was not until 1995-96 that world flour exports first exceeded 10 million tonnes of grain equivalent.

The I.G.C. slashed its earlier estimate of 2012-13 flour exports by 650,000 tonnes, from 12,879,000 to 12,220,000, largely due to import restrictions imposed in the year by the government of Indonesia. That country originally was expected to import 900,000 tonnes of flour in wheat equivalent, but the total was cut to 500,000 as the Jakarta government responded to complaints about flour dumping. Its response primarily took the form of raising the import tariff to 20% ad valorem, from 5%, and providing that the higher levy took effect last Dec. 5 and would remain on flour “from major origins” for 200 days.

Another decrease from an earlier estimate was in Uzbekistan’s flour imports in 2012-13. The total was seen falling short by 200,000 tonnes.

Kazakhstan and Turkey, the leading shippers, also were the countries that felt the impact of the reduction in 2012-13 volume. Kazakhstan’s exports in the season just now drawing to a close were reduced 500,000 tonnes to 2.3 million, while Turkey was cut back by 300,000 tonnes to 2.5 million. As compared with 2011-12, when Kazakhstan exported a record 3,652,000 tonnes of wheat flour in grain equivalent, the revised estimate for 2012-13 was down 37%. In Turkey’s case, the reduction was 17% from 3,013,000 in 2011-12.

The exports in the latter year for both countries set new records, and Kazakhstan’s shipments, at the equal of nearly 60 million cwts, were among the largest ever by a single nation.

In the wake of the reductions, both nations were seen as likely to post increases in the new year. Both gains were attributed to larger domestic wheat crops. Kazakhstan exports in 2013-14 were forecast at 3 million tonnes, up 30% from 2.3 million in 2012-13, while Turkey’s flour shipments in 2013-14 were projected at 2.6 million tonnes, up 4% from the prior crop year.

Other leading exporters are Argentina and the European Union, each projected to ship 1.2 million tonnes of flour in wheat equivalent in 2013-14. The E.U. total was unchanged from the preceding year, while Argentina’s exports, mainly to Brazil, showed a 100,000-tonne gain.

The United Arab Emirates was the only other likely shipper of 1 million tonnes or more of wheat flour, which has been its pace for some years.

The United States, China and Russia were in the same band of likely flour exports, each projected at near 400,000 tonnes in 2013-14.

A rebound in 2013-14 of flour imports by both Indonesia and Afghanistan accounted for the outgo increase in prospect for the new 2013-14 season. In turn, this underscored the expanding importance of the Far East as a destination for flour shipments. According to the I.G.C., all the countries of the Far East will import 3,710,000 tonnes of flour in wheat equivalent in 2013-14, up 27% from the previous crop year and slightly above the area’s record imports of 3,610,000 in 2011-12. Afghanistan flour imports in 2013-14 were projected at 1.3 million tonnes, against 1 million in the year just ending. The Council also said that Indonesia’s imports will recover to 900,000 tonnes, from 500,000 in the preceding year, as long as the government stays with its penalty import quota timing.

Commenting on these matters, the I.G.C. said, “Given low shipments to date, expected purchases by Uzbekistan have been reduced by 200,000 tonnes. Kazakhstan’s exports are also revised down, with Afghan traders expected to be sourcing flour from Pakistan where availability is better.”

Uzbekistan once again will be the leading importer of flour in the 2013-14 season. Its takings were projected by the I.G.C. at 1.5 million tonnes in wheat equivalent, up 15% from the prior year’s 1.3 million but well short of the peak of 1,939,000 tonnes in 2011-12.

Afghanistan remained in second place with likely imports of 1.3 million tonnes, against 1 million in 2012-13 and 1,264,000 in 2011-12.

Iraq was projected to take 1.2 million tonnes in 2013-14, unchanged from the previous year, but down from 1,359,000 in 2011-12.

Brazil and Indonesia were the two flour importers projected to take 900,000 tonnes in the new season. Angola in Africa and Tajikistan were the only other two importers in the 500,000-tonne range.

As has been the case for a number of years, the I.G.C. does not include durum semolina shipments in flour exports. It forecasts shipments of this flour in 2013-14 at 350,000 tonnes of wheat equivalent, the same as in 2012-13 and compared with 360,000 in 2011-12.