Global importers reduce wheat purchases due to financial difficulties

Economic recession and currency volatility are holding back grain demand, which, together with low global inventories, is putting pressure on grain prices.

Global wheat demand is declining due to economic difficulties in key importers, a strengthening US dollar and increased domestic production. Reuters reports.

Despite concerns about yield losses in the Black Sea region, India and the US, the pace of purchases by major importers is slowing. This is especially noticeable in China, Indonesia and Egypt, which are usually the main buyers of wheat. In particular, China, the largest importer, may reduce purchases by more than half compared to last year in the first half of 2025, which will have a significant impact on the global market.

At the same time, China continues to increase its own grain production. The USDA estimates that China’s wheat harvest will increase by 2.6% in the 2025 marketing year, which could lead to a 37% drop in imports to 8 million tonnes. This is a long-term trend as countries try to reduce their dependence on global supply chains due to geopolitical instability.

Meanwhile, in Indonesia, the recovery of rice production after last year’s losses caused by a record drought is also reducing demand for imported wheat. The government forecasts that the rice harvest in 2025 will increase to 32.8 million tonnes, which will encourage local processors to use rice flour instead of wheat flour.

Iraq, one of the largest wheat importers in the region, is also significantly reducing purchases. Due to the large harvest, the country has accumulated 1.5 million tonnes of excess stocks, which has allowed the government to completely abandon imports for state programs.

In addition to the growth of local production, global demand for wheat is being held back by economic difficulties in major importers. In particular, the Chinese economy is showing signs of slowing, which is directly affecting food import volumes. In addition, the yuan has weakened due to trade disputes with the United States.

At the same time, Indonesia and Egypt are also experiencing economic downturns. The Indonesian rupiah and the Egyptian pound have weakened against the dollar, which increases the cost of imports, even despite low prices on the world market.

Egypt, the third largest wheat importer, is forced to rely on support from Arab countries to purchase grain. State buyer Mostakbal Misr purchased 1.267 million tons of wheat in December 2024, which covered the country’s needs until June 2025. However, the total volume of imports is significantly lower than in previous years.

The reduction in Chinese purchases is expected to hit Australian farmers, who have harvested a near-record harvest and have been dependent on Chinese demand in recent years, particularly hard.

Analysts predict that China will buy only 1 million tonnes of Australian wheat in March 2025, significantly less than in previous years, when this figure was twice or three times higher. Because of this, Australian producers will have to look for new markets for their products.

The day before, USM wrote that Ukraine will have to look for new markets for wheat when the terms of trade with the EU change.