Domestic Economy

FAO: Iran’s Wheat Output to Rise 44% to 13m Tons in 2022

Due to a projected rise in production, imports are forecast to decline from 7.9 million tons to 3.4 million tons
FAO: Iran’s Wheat Output to Rise 44% to 13m Tons in 2022
FAO: Iran’s Wheat Output to Rise 44% to 13m Tons in 2022

The Food and Agriculture Organization of the United Nations has forecast Iran’s wheat production to increase to 13 million tons in 2022 from an estimated 9 million tons in 2021, which will mark a 44% rise.
In its biannual report on global food markets, FAO has put the 2019-20 average wheat production in Iran at 14.3 million tons.
Due to the projected rise in production, imports are forecast to decline from 7.9 million tons to 3.4 million tons.
The 2018-19 to 2020-21 average import has been put at 1.6 million tons.
Wheat consumption is forecast to slightly increase from 16.2 million tons in 2021-22 to 16.4 million tons in 2022-23.
The three-year average consumption has been put at 15.8 million tons.
According to FAO, Iran’s wheat stocks in the year to 2023 is forecast to decline to 6.9 million tons from an estimated 7 million tons in 2022. The average stocks volume during 2019-21 has been put at 6.4 million tons.
Per capita wheat consumption is forecast to slightly increase to 169.7 kilograms per year in 2022-23 from an estimated 169.4 kilograms per year in 2021-22.
The three-year average per capita has been put at 168.7 kilograms per year.
Global wheat markets are embarking on the 2022-23 season with a great deal of uncertainty. The impacts of the ongoing war in Ukraine, trade policy changes in several countries and high international prices will shape much of the wheat market outlook. 


International wheat prices

are at levels not reached since 2008, following a season of tight global availability due to reduced harvests in some major exporting countries and export suspensions by others, including Ukraine (a major exporter) and India (an emerging exporter), along with supply concerns for 2022-23 also adding pressure. 
Global wheat production in 2022 is predicted to decline from the 2021 record level by 0.8%, reaching 771 million tons and marking the first drop in four years. Year-on-year declines in production in Australia, India, Morocco and Ukraine will likely outweigh an expected increase in Canada, Iran and the Russian Federation. 
While world food consumption of wheat is projected to expand, albeit at a below-average pace, a decrease in the feed use, driven by high prices and, to a lesser extent, industrial use of wheat is anticipated to cause a 0.4% decline in total wheat utilization in 2022-23 to 769 million tons. This would be 1.1% below the 10-year trend, marking the first time in three-year years that global utilization has fallen below the trend. 
With global production is preliminarily forecast to exceed utilization in 2022-23, world wheat stocks are set to increase marginally, by 0.4%, to 298 million tons by the close of the seasons in 2023. However, much of that increase is foreseen to be concentrated in China, the Russian Federation and Ukraine, while stock drawdowns are anticipated in several countries in Africa and Asia. 
At 189 million tons, the preliminary forecast for world trade in wheat (including wheat flour in wheat equivalent) in 2022-23 (July-June) points to a 1.7% decline from the 2021-22 level. The contraction mainly stems from an anticipated significant reduction in exports from Ukraine as a result of the blockade of its ports by the Russian Federation. 
Smaller shipments are also forecast for Argentina, Australia and India, stemming from lower production on top of an export ban in India. On the import side, smaller purchases by several Asian countries, especially China and Iran, are seen lowering global import demand. 



Impact of Russia-Ukraine Conflict 

Some 20% of Iran’s wheat imports were from Ukraine in the last Iranian year (March 2021-22), according to the head of Iran’s National Wheat Farmers Foundation.
“The war between Ukraine and Russia, both among the main exporters of wheat in the world, has negatively impacted the international market of the grain. Moreover, global water shortage and drought have decreased wheat production across the world and right now the market is tumultuous,” Ataollah Hashemi was also quoted as saying by IRNA.
Ukraine, according to the official, accounts for 10 million tons or 10% of the global wheat exports and is the fifth biggest exporter of this staple grain, yet, based on the latest figures released by the Food and Agriculture Organization of the United Nations, the country has lost more than half of its annual production this year.
“Because of US economic sanctions imposed on Iran, which already makes trade a challenge, our domestic market supply is more at risk in this situation,” he said.
“Russia and Ukraine have been traditional suppliers of the staple grain as well as corn and oilseeds to Iran for years. Other countries, too, buy part of their demand for wheat from the two countries now engaged in war. We import wheat from Germany, Australia, Canada and Argentina as well,” the head of Federation for Iranian Food Industries Associations, Mohammad Reza Mortazavi, was quoted as saying by ILNA.
Noting that every year up until May, prices of agricultural products rise, the official said this year the conflict between Ukraine and Russia has also impacted global prices, adding that over the past six months, wheat has seen the highest price rise in the past five years.
“The war has also made other nations think about purchasing agricultural products and food, and store the commodities to ensure supply to their local markets. Whenever Egypt and China in particular start to fill up their reserves, the international market goes through another price hike. We hope that with the beginning of the harvest season, prices will come down,” he said.
“We, like other states, need to import goods to fill in our strategic reserves, but I believe the best time to make purchases for this purpose are the four months after May, that is June, July, August and September when harvest takes place and prices are moderate. Right now, global prices are at their highest level and if, hopefully, the war in Ukraine comes to an end and no other wars are waged, we can be optimistic that prices will decline in the international market.”  



$22.84b Worth of Imports in 3 Decades

Over the past 30 years (March 1992-2022), Iran has imported 96.48 million tons of wheat worth $22.84 billion, according to the spokesperson of the Islamic Republic of Iran Customs Administration.
“The highest volume were imported in the fiscals 2014-15 with 7.43 million tons, 2021-22 with 7.07 million tons and 2001-2 with 6.77 million tons,” Rouhollah Latifi was also quoted as saying by ILNA.
The official noted that the lowest wheat import figure pertains to fiscal 2018-19 with only 360 tons. 
During the same year, he added, wheat prices were the highest in the 30-year review, with close to $0.70 for each kilogram while the fiscal 1994-95 saw the lowest import price for the grain at nearly $0.10 per kilo.   

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