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Summary
The International Grains Council (IGC) forecasts global wheat flour trade to drop to a three-year low of 15.3 million tonnes in the 2024-25 marketing year, representing a 10% decline from last year's six-year high. However, initial projections for 2025-26 indicate a potential rebound to 16.1 million tonnes, driven by renewed purchasing from sub-Saharan Africa and modest increases across Asian markets. This market shift presents both challenges and opportunities for traders navigating the evolving global wheat flour landscape.
Key Market Shifts
The primary driver behind this downturn is reduced demand from Iraq. The Iraqi government's decision to permit higher wheat exports in 2023-24 amid abundant local supplies has subsequently dampened flour purchases by buyers in sub-Saharan Africa, a key import region.
Turkey, the world's largest flour exporter, is facing particularly challenging conditions. The IGC projects a dramatic 33% reduction in Turkish flour shipments this year, dropping to a 10-year low of 3.8 million tonnes. This decline stems largely from import restrictions that limited Turkey's access to competitively priced wheat from the Black Sea region during the initial months of 2024-25.
Despite these restrictions, Turkish exports to sub-Saharan Africa reached an impressive seven-year high of 3.1 million tonnes in 2023-24. However, this volume is forecast to decrease to 2.4 million tonnes in the current marketing year, aligning more closely with the five-year average.
Regional Dynamics
Several countries in sub-Saharan Africa, including Ethiopia, Somalia, and Sudan, increased their imports in 2023-24, also sourcing from Egypt as they faced challenges in their domestic milling industries. However, with Turkey's reduced export potential this season, deliveries to the region are expected to normalize.
Another interesting trend highlighted by the IGC is the shift in sub-Saharan Africa's import strategy. The region is increasingly favoring direct wheat purchases over flour imports, with the proportion of wheat flour in total wheat deliveries dropping from 12% to approximately 6%.
Afghanistan, another major flour importer, is projected to maintain similar intake levels to last year, with estimated imports of 3.05 million tonnes in 2024-25.
Bright Spots in the Market
Despite the overall decline, Kazakhstan represents a positive outlier in the market landscape. The IGC forecasts Kazakhstan's flour exports to reach a seven-year high of 3 million tonnes, up from 2.7 million in 2023-24. However, the report notes that flour shipments from Kazakhstan to Afghanistan (typically its main destination) were slightly lower year-on-year during the first six months of 2024-25, at approximately 900,000 tonnes.
For Turkey, there may be potential for recovery following the recent removal of import limitations for wheat, though this upside may be constrained by waning demand from Iraq and increased competition from Egyptian suppliers in African markets.
Looking Ahead
The IGC's initial outlook for 2025-26 offers a more optimistic perspective, with a forecast of moderate growth to 16.1 million tonnes. This potential rebound is expected to be driven by renewed purchasing activity in sub-Saharan Africa, complemented by modest annual increases in other regions, particularly Asia.
Conclusion
The projected decline in global wheat flour trade for 2024-25 reflects complex shifts in market dynamics, from changing import strategies to evolving supplier relationships. While the current outlook points to a contractionary phase, traders should remain alert to opportunities emerging from Kazakhstan's strong export position and the potential market recovery forecasted for 2025-26. For stakeholders across the wheat flour value chain, adaptability and strategic market positioning will be essential in navigating these transitions. As global trade patterns continue to evolve, staying informed on regional supply-demand balances and policy developments will be crucial for capitalizing on future market movements.