Wheat supplies globally have been under the constant influence of climatic and human factors, especially with Covid-19 wreaking havoc in Asia, jeopardizing food security. For many Asian countries, apart from human consumption, wheat, corn, and soybeans are used in animal feed to produce beef, pork, poultry, and fish for their domestic markets. China, especially, has shown significant growth in the import of wheat. China's wheat imports, on a value basis over the last five years, rose 166.24% from Australia, 302% from the US, and 207.93% from Canada. Besides China, South Korea, the Philippines, and Vietnam increased wheat trade due to additional wheat feeding, while Indonesia’s imports decreased. Strong demand for wheat from China is contributing to higher food prices globally. The connectivity of international trade can be seen in Russia and Ukraine's examples. Although major suppliers for South East Asia countries were the US, Canada, and Australia, the Black Sea corridor is affecting global wheat prices, influencing supply and demand. Because wheat and wheat products are a staple food for the global population, it plays an essential part in food security.
From August to October 2021, the top five wheat importers in Southeast Asia (Indonesia, Bangladesh, Vietnam, Philippines, and Thailand) received over half of their total sales from Ukraine, Russia, and the EU-27. In 2022, adverse weather conditions hampered wheat production in the EU, while exports from Ukraine are having difficulties reaching Asia countries.
Top Import Flows of Wheat
Tridge Meal Indices examine the movement of food prices by analyzing the top ingredients of the most consumed dishes in each country. With Tridge Meal Indices, the movement of the food prices can be followed closely, with representations of WoW, MoM, and YoY price movements. Based on Tridge Meal Indices, South Korea and Thailand had the highest increase in food prices. South Korea's Meal Index has grown 6.98% YoY, while Thailand's increase was 5.97%. Malaysia recorded just a 1.90% YoY change, and Taiwan has shown a significant decrease of 25.81% YoY.
Southeast Asia is dependent on complex international food supply chains. Adverse weather, in the form of heat waves and monsoon flooding, can severely impact smallholder farmers, pushing economies to hunger and poverty, bearing in mind that the population is constantly growing and the need for an increase in food production is always present. According to the Asian Development Bank (ADB), a plan valued at at least USD 14B by 2025 was set in motion to mitigate food security, helping farmers cope with climate change and increase sustainability. Over 1.1B people in the Asia-Pacific region are meant to be supported by this program, with funds boosting existing and new projects regarding farming, food production and distribution, water resources management, and social support. Based on ADB assessments, more than 100M people are pushed into hunger, while there are also estimates that a further increase of just 10% in food price inflation could drive another 64M into poverty.
Global Price Trends Tridge Meal Indices