COMMODITY MARKET UPDATE; WHEAT
Our commodity focus for last week is wheat. Wheat is one of the world’s most commonly consumed cereal grain. It is grown in almost every part of the world. Global demand for wheat has been on the increase side. The Food and Agriculture Organization in 2016 claimed Wheat to be the second most-produced cereal after maize as global production of wheat then, was 749 million tonnes. The increase in the world production could be attributed to consumer tastes and preference, and to the demand for the varieties that came out of wheat. Wheat being the leading source of vegetal protein in human food when relatively compared to other major cereals explains the consumer preference.
Even as the global production Increases, the price still fluctuates due to the forces of demand and supply.
The table above shows the trading prices that occurred in the past week, that is from 25th-31st of March 2019. The highest price traded was $173.89/tonne while the lowest price traded was $168.80/tonne.
The wheat global market experienced a decline in all of its trading days except on Tuesday, 26th March 2019 where it had a change of 0.69%. This decline was generally attributed to the fact that some part of India (the 2nd top world producer of wheat) is expecting to reap a bumper harvest of wheat.
However, from the news about wheat this past week, the prices should increase considering the Heavy snow in the United States (a top global producer of wheat) that threatens the wheat crop. This limits the total production, and with a high demand, producers will increase prices since many consumers are competing for few goods. Local wheat production in Zimbabwe also declined. This is expected to bring about an increase in price. The anticipated low production of wheat in Pakistan, the 8th top global producers of wheat should also bring about an increase in the price
We expect an increase in the prices of wheat this new week.
By Oladele Abigail
Oladele Abigail, an economics student of Bowen University who applies her passion for writing to her career path.
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