The upward revision reflects higher forecasts, especially for Algeria, Egypt, Pakistan, the Republic of Korea, and Sudan. However, even at the revised level, international wheat trade would remain below the previous seasons estimated volume, mostly due to a sharp fall anticipated in imports by the developed countries, which would more than offset an increase expected in aggregate imports of the developing countries.
Aggregate wheat imports by the developed countries in 2004/05 are currently estimated at about 19 million tonnes, which is considerably below the previous seasons level, mostly reflecting bumper crops in several countries in Europe.
The EU is expected to account for most of the decline with currently large supplies among the 25 member states reducing their aggregate wheat import needs to an estimated 4.6 million tonnes, of which about 3 million tonnes of low-and medium-quality wheat could be imported at a reduced tariff rate of 12 Euro per tonne (as opposed to 95 Euro per tonne for imports outside the quota system) .
Total imports by the developing countries are forecast at 81 million tonnes, up 8 million tonnes from the previous season. In Asia, the biggest increase is expected in China (Mainland), where imports are expected to reach 7 million tonnes, compared with 3 million tonnes in 2003/04.
In October, China also released its 2005 low-tariff import quotas for grains, of which wheat has been set at 7.2 million tonnes. In spite of the increase in Chinas wheat production this year, wheat prices have surged by more than 30% since last year, driven by strong demand and lower stocks.
A number of other Asian countries are also expected to import more wheat this year, but most, like the Republic of Korea, are expected to seek cheaper feed wheat as an alternative to maize since feed wheat is abundant this year, as a result of large exportable supplies in the Black Sea countries.
Worries about possible water shortages affecting next years crops and the need to increase strategic reserves are the main factors for high imports this season. In addition, strong freight rates and a weak US dollar continue to influence their markets worldwide.