Wheat is one of the world's three most important cereal crops along with maize and rice. It is reported to be grown domestically from atleast as early as 9000 BC and is now grown in almost all parts of the world.
Wheat is a globally important source of dietary carbohydrate (starch) and protein (gluten). Its grain is a staple food used to make flour for leavened, flat and steamed breads, biscuits, cookies, cakes, breakfast cereal, pasta, noodles etc and for fermentation to make beer, alcohol, vodka, or biofuel. It is also used for feeding animals to a limited extent.
Different varieties of wheat are grown across the world. The three principal types of wheat used in modern food production are: Triticum vulgare (soft wheat), Triticum durum (hard wheat) and Triticum compactum
The annual global wheat production has been in the range of 600-630 tonnes in the recent years. However, in 2008-09 it is estimated to have risen sharply to 689 million tonnes. The combined production of all cereals in 2008-09 is estimated to be 2525 million tonnes.
EU-27, China, India, USA and Russia are the five major producers of wheat accounting for close to 70% of the total global production, with 2008-09 production in these regions being 151, 112.5, 78.6, 68 and 63.8 million tonnes respectively.
Wheat is the most important cereal traded in the world market. The global trade in wheat during 2008-09 was sharply up at around 140 million tonnes in 2008-09 from an average of around 110 - 115 million tonnes in the recent previous years.
While US (25 - 35 million tonnes), EU-27 (15-25 million tonnes), Canada (15-20 million tonnes), Australia (8-18 million tonnes) and Argentina (6 - 12 million tonnes) are major exporters, there are a large number of countries importing wheat with maximum demand emanating from developing nations. The major importing regions are Middle-east Asia, South-east Asia and North-west Africa. Egypt, Brazil, Indonesia, Algeria are the most important importing nations.
Wheat crops around the world have their own unique production cycles of planting and harvest timeframes.
Important World Wheat Markets
Derivatives exchanges - Chicago Mercantile Exchange, which acquired Chicago Board of Trade, Kansas City Board of Trade, Zhenghzhou Commodity Exchange, South African Futures Exchange, MCX, NCDEX
US FOB and EU (France) FOB prices determine the physical prices
Market Influencing Factors
Wheat is an annual, seasonal crop and prices usually tend to rise during the cultivation period, i.e. December to March due to scarcity in the market and dip during the peak arrival period (April and May).
Weather has a profound influence on production, especially in Haryana and Punjab as temperature plays a crucial role in determining the yield.
The Govt. policies with regard to MSP, buffer stocks, PDS sales, Open Market Sales, imports / exports are very important influencing factor with regards to Indian wheat prices.
Despite international trade being limited, the several variations in production or consumption at various major or minor producing or consuming country, which influence global prices, are reflected in the domestic long-term price trend. However, in the short-term normally there is no significant relation with international prices.
Several international agencies like US Dept. of Agriculture, International Grains Council, Food and Agricultural Organisation release regular, periodic reports on global supply-demand situation, which is widely looked upon by the global players.
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