Drought Outside the World’s Breadbaskets Reroutes Global Grain Flows

18 October 2021

Drought has hurt production in several big agricultural countries over the past year. At the same time, drought has reduced harvests in many smaller-producing countries, which collectively can have an outsize impact on world commodity prices and trade flows. 

Gro’s agricultural and climate analytics enable users to easily take stock of parts of the world that aren’t readily available via government-run agencies. Gro’s balance sheets, for example, show a full range of supply and demand data in one view. And crop-weighted analytics in Gro’s various Climate Risk Navigator apps allow users to highlight growing conditions specific to individual crops. 

Take Iran, for instance, a major wheat importer despite the fact it produces nearly as much wheat as the UK. Hurt by drought, Iran’s recent winter wheat harvest was down 10% from last year, causing expected imports to more than double in the coming year, as seen via Gro’s Iran Wheat Balance Sheet

Iran relies almost exclusively on Ukraine for wheat imports, and Iran’s sharply increased import needs this year could drive prices higher for all buyers. Ukraine also is a key wheat supplier to Bangladesh, Egypt, Indonesia, and the Philippines. Follow Gro’s Black Sea Wheat Yield Forecast Model for an early glimpse of supply available in the region. 

Most of Iran’s non-irrigated wheat area is in the country’s northwest where drought and extreme temperatures have been prevalent, as shown via Gro’s Drought Index. Continuing drought could also weigh on Iran’s next-season production if the rainy season, typically October to April, continues to bring below-average precipitation

In 2008/09, drought and heat stress slashed Iran’s wheat production by 50% and imports soared to a record 6.8 million tonnes. The current drought is even more intense than the 2008/09 crop season and bears close watching moving forward. Drought and grain shortages have also sparked political unrest in the region. 

Gro’s Climate Risk Navigator for Agriculture app is particularly useful in regions where a country’s land area is not wholly suited for agricultural production, such as Iran. Weighting a country’s crop provides a much more representative picture of current growing conditions. For instance, the Gro Drought Index, weighted in the Climate Risk Navigator app to Iranian wheat acres, currently reads 3.29, on a scale of 0 to 5, signifying severe drought. Please reach out to sales@gro-intelligence.com for more information on this powerful application. 

 

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