Export Supplies of World Wheat Dropping Drastically; WTO, Calls It Good Thing for Speculators and "Reducing Demand"
October 29, 2012 • 9:22PM

Supplies of wheat-for-export are low in the combined eight biggest source nations for world trade in this staple grain—six in the Northern Hemisphere—United States, Canada, France, and Russia, Ukraine and Kazakhstan; and Argentina and Australia in the Southern Hemisphere. These eight nations together account for 85+ percent of all world wheat traded. Stocks of wheat-for-export will be drastically low before the next harvests come in.

This wheat situation parallels the acute shortage of corn at present, both of which are man-made, not "natural" disasters. A swift policy shift to ban the WTO, and return to programs for food increase and sufficiency, based on restoring the Glass-Steagall and credit principles, can work.

Ukraine, defying the WTO, will stop exporting wheat as of Nov. 15, in order to have sufficient for domestic needs and as a buffer. At some point before year-end, Russia and Kazakhstan my do likewise. These nations also temporarily banned wheat exports after the 2010 grains harvest disaster. This year's Russian wheat harvest is likely even lower than 2010. It is down 37% from last year.

On the imports side, those nations most dependent on foreign wheat for their daily diet (bread, couscous, pasta) are in North Africa and across Southwest Asia, which together annually import 35 to 40% of all wheat traded internationally. These include, from the Maghreb through to Egypt, and Israel, Lebanon, Iraq, Iran, Saudi Arabia, Yemen, Jordan, Kuwait OAE and Oman.

It is estimated that this current year, only 130 mmt of wheat will go into export internationally, far down from 155 mmt last year. Moreover, almost all grain that is traded is done through a tight cartel of a select few mega-firms, such as Cargill (interlocked with Monsanto), Bunge, Louis Dreyfus, ADM.

The wheat supply crisis is occasioned, in the short term, by dry, searing conditions in the 2012 growing season in the Northern Hemisphere nations' grainbelts, and in the long term, by the fact that these regions—with excellent soils—are still rainfed, not irrigated, arising from the prevention of water infrastructure development. Wheat output in the Black Sea region of Russia, Kazahstan and Ukraine is at a 9-year low.

Worldwide wheat production this current crop year (658.73 million metric tons), is 6 percent down from last year (695.7 mmt), and barely one percent above two years ago 652 mmt). Stocks—grain not consumed in the current crop/trade year, are falling drastically. World wheat stocks are headed to 176 mmt, down from the 198 mmt level of the past two years. For example, in France and the EU27 generally, wheat stockpiles are headed to a 14-year low.

The WTO response—true to its nature, is to decree that the London neo-British Empire program must prevail: make food scarce, speculate on scarcity, control who gets food, and starve people. The U.S. officially backed this policy in October, in its statement to the Group of 20, that no intervention is called for in the world food crisis; instead, the world must rely on the "markets" system, to ration food, by price. The WTO insists nations must not ban exports.