The global wheat market is going to reduce in 2019 due to the unfavorable weather in EU, Kazakhstan, Russia, Ukraine, and Australia.
But nature is not the only reason for that: the governments of the major wheat exporters constrain the global wheat supply. It has increased costs and uncertainty for global wheat buyers.
Ukraine and Argentina have changed their laws for the wheat export due to the strong control of the internal price for the bread and wheat in general.
In Ukraine, wheat traders are allowed to export no more than 16 million tons from now, including 8 tons of milling wheat. This limit will cause Ukraine’s total wheat exports to fall by 7 percent.
In Argentina, President Macri announced a 4 peso per dollar export tax on wheat and corn shipments. This export tax will raise Argentine wheat prices by roughly 10 percent.
These policy changes and uncertainty from the world’s top wheat exporters come at a time when global wheat consumption is increasing and with it, the need for additional global exportable supply.
