Global grain consumption has consistently risen over the past 50 years and is expected to continue, driven by population growth and rising per capita incomes in emerging economies. Grain consumption is forecast to increase by 13% over its current level to reach 3.49 billion tonnes consumed by 2027.
Bottom of the cycle
The inflation adjusted price of wheat per tonne ($US) is currently among the lowest it has ever been on record (since 1866), reflecting high supply. However, according to independent reports from sources such as The World Bank, soft commodity prices are now in the early stages of a new cycle – the upward leg. Driven by the structural imbalance in the global markets, The World Bank predicts a 23% increase in nominal wheat prices over the next 8 years. This cyclical turnaround in prices over the longterm suggests an opportune time for investment in agriculture, including grains.
Global demand for grains is expected to increase over the next five years. By 2027, global grain consumption is forecast to increase by 13% over its current level, to reach 3.49 billion tonnes consumed
This growth in demand is likely to continue to be driven by population growth, and a substitution of wheat for traditional grains in emerging regions such as Asia and Africa. It is our belief that this growth will result in over 150 million new mouths to feed every year. Based on this forecast, it is expected demand will outstrip supply. Australia with its strong export market and close proximity to Asia is extremely well positioned to capitalise on this trend.
Growth in demand
Supply and Demand Trends for the Global Grain Industry
Worlds Wheat Exports By Region (value)
Global Grain Production and Consumption (million tonnes)