The average annual wheat price in the U.S. is forecast to drop by 2% y-o-y to $250 per tonne in 2022, falling on reduced domestic consumption coupled with stable supply worldwide. The market balance will be buoyed by production gains in Argentina and the EU that will offset decreasing output in Brazil and Paraguay.
By 2024, EU grain prices are expected to decrease moderately due to falling demand for livestock feed. There's a risk that if high prices for gas and a related fertilizer imbalance continue for several years, they may negate effects from the demand change. Expected increases in consumption of organic produce could also buoy the prices. By 2025, grain trade in the EU will decline by 8% to 84М tonnes due to diminished production and tough competition in global markets.
In 2020, Poland’s wheat exports skyrocketed to $1B, reaching the highest point ever. In physical terms, exports soared from 2.1M tonnes in 2019 to 4.7M tonnes in 2020. The leading importer of wheat from Poland, Saudi Arabia, increased its purchases more than twofold last year. South Africa became the second-largest importer, unprecedently boosting shipments to 773K tonnes. The average export price for wheat from Poland jumped by +7.5% y-o-y to $223 per tonne in 2020.
In 2020, total wheat bran imports stood at 6.6M tonnes or $1.1B in value terms, remaining stable against the previous year. Turkey is the largest wheat bran importer, accounting for 24% of global imports. Turkey, China, the Netherlands and Saudi Arabia increased their imports while supplies to Viet Nam, Germany, Canada, South Africa and Thailand declined in 2020. China emerged as the fastest-growing importer. The average wheat bran import price rose by +4.8% y-o-y to $174 per tonne last year. Russia, Indonesia and Germany constitute key wheat bran suppliers worldwide.
In 2020, global wheat gluten production reduced by -2.4% y-o-y to 1.1M tonnes. France, China and Belgium lead in world gluten manufacturing, with a combined 50%-share of its total volume. Global wheat gluten exports grew by +6% y-o-y to 928K tonnes in 2020. In value terms, world exports saw a drop, as the average wheat gluten export price decreased in the past year. Germany, Belgium and France were the largest gluten exporters in 2020. The UK and Poland recorded the highest export growth rates last year. Norway, Belgium, France and the Netherlands emerged as the countries with the highest per capita consumption figures.
Imports of durum wheat in the EU surged by +25% y-o-y to 6.1M tonnes, reaching $1.7B in 2020. Over the last year, the share of durum supplies by volume in the total European wheat imports increased from 15.4% to 19.2%. Italy represents the largest importer of durum wheat in the EU. Belgium emerged as the fastest-growing European importer of durum wheat in 2020. The total imports of all types of wheat estimated at 32M tonnes or $7.4B in value terms.
In 2020, the total bread and bakery market in the EU countries and in the UK slightly dropped to $88.7B due to lockdowns in the HoReCa segment. In the second half of 2020, demand began to rebound quickly, and in 2021, the output of bread and baked goods reached pre-pandemic levels. In the past six months, prices for bread slightly increased due to the rising costs of grains. In the mid-term, higher prices are forecast because of accelerated inflation for commodities globally. The gradual population growth in tandem with the growing desire for organic, wholegrain and gluten-free bread, as well as bread with immunity-boosting supplements, will drive the market in the medium term.
This year, harvests in the EU, the U.S., the UK, Argentina, Morocco and Ukraine are expected to increase, leading to a growth in wheat production. Even though global stockpiles of grains will remain high, there are boosted expectations for inflation due to forecasts of record demand and increased prices for other cereal grains. The rising global population and bioethanol production are key factors leading to this growth in demand for wheat. Another driving factor is the emerging trend in the EU to use more wheat in animal feed rather than barley.
2021 is forecast to see global barley supplies outstripped by demand. This may lead to a sharp rise in grain prices. A substantial proportion of consumption growth is driven by the demand from China for barley-based feed, as China's livestock population continues to recover from the swine fever outbreak. Shortages in supply are expected due to the poor crop yield owing to the adverse weather conditions in Russia, Australia, Turkey and the UK.