Harsh weather curbs global wheat output, fuels sudden price surge
Harsh weather, including drought and frost, is reducing wheat production in major exporting countries like Russia, Argentina, and Australia, driving inventories to a projected nine-year low. Dry conditions are also affecting future wheat plantings in the U.S., Ukraine, and Russia, exacerbating supply concerns. Russia recently lowered its 2024 wheat crop estimate, contributing to tightening global markets. Analysts warn that the situation may worsen, as world wheat inventories have already dropped 14% from peak levels five years ago.
Harsh weather is reducing wheat production in major exporting countries, cutting inventories that have already been projected to hit nine-year lows while fuelling a sudden surge in prices.
Dryness afflicting suppliers from Russia, the world’s biggest, to Argentina is making food production vulnerable as recent Russian attacks on grain ships in the Black Sea rekindle concerns about the war limiting supplies.
While analysts said top southern-hemisphere exporters Argentina and Australia have lost several million metric tons of wheat to drought and frost, a lack of moisture is hitting plantings for 2025 crops in Russia, Ukraine and the United States.
Russia also lowered its 2024 wheat crop estimate, according to a report Thursday citing Deputy Prime Minister Dmitry Patrushev.
“The wheat market is getting tighter and it is going to get worse,” said Ole Houe, head of advisory services at IKON Commodities in Sydney.
Estimated world wheat inventories have fallen about 14 per cent from record highs five years ago, US data shows, as poor weather hurt output and Russia’s 2022 invasion of grain-exporter Ukraine temporarily spiked crop prices.
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