Drought-hit countries in the Middle East are forecast to import record amounts of wheat this year. But import plans could be impacted by the continuing conflict between major wheat exporters Russia and Ukraine, which could threaten global supplies and drive wheat prices higher.
Wheat imports to the Middle East are forecast to soar by 38% year over year to 24.6 million tonnes in 2022. Meanwhile, countries in North Africa, the world's largest wheat-importing region, also are expected to see sharply higher grain imports as drought slashes domestic production. Any export disruptions from Ukraine or Russia would increase competition for wheat supplies, already at their tightest levels in years, from other major exporters, including the EU, Australia, and North America.
Iran, the Middle East’s top wheat producer, is expected to see production drop 20% this year to 12 million tonnes, which is 17% below the 5-year average. Iran’s wheat-growing areas have experienced “severe” levels of drought since mid-May 2021, according to Gro’s Climate Risk Navigator, which can weight growing conditions by specific crops.
Meanwhile, wheat-growing areas in neighboring Iraq are also suffering from “severe” drought, while Syria’s wheat regions show “extreme” levels of drought. The region’s drought readings are from the Gro Drought Index, which measures drought on a scale of 0, or no drought, to 5, or exceptional drought. Drought measurements are updated daily at the district level across the globe.
Gro’s Climate Risk Navigator is particularly useful in regions where a country’s land area is not wholly suited for agricultural production, such as the Middle East, and weighting indices by individual crops provides a more representative picture of current growing conditions. Gro’s Navigator also looks at NDVI, a key indicator of crop health, soil moisture, temperature, and other key indices.
The Middle East grows a winter wheat variety. The crop is planted in November-December and harvested in June-July, as seen with Gro’s crop calendar.
Middle Eastern countries rely heavily on wheat imports, particularly in years of low production. Wheat is sourced mainly from the EU, Russia, Ukraine, and Kazakhstan. Russia has already capped its wheat exports with an export quota that runs from Feb.15 to the end of June. Russia also imposed a floating-rate wheat export tax, enacted last June, that has curbed year-over-year exports of the grain.
Countries hold back exports to ensure adequate domestic availability. Increases in crop sizes can lift these controls, as prices retreat. Ukraine’s and Russia’s current winter wheat crops appear to be doing even better than last year, but their prospects will become clearer when the crops emerge from dormancy in mid-March. Gro’s Black Sea Wheat Yield Forecast Model, available to Gro Premium subscribers, can aid in forecasting production prospects and supply availability for export.