Fitch Solutions raises global wheat price forecast

October 6, 2022 (MLN): Fitch Solutions on Thursday increase global wheat price forecast upwards to US Cents 933/bushel from USc920/bu previously, a research report showed.

“We are revising our 2022 average wheat price forecast upwards to USc933/bu from USc920/bu previously, requiring prices to range trade, at around USc910-930/bu, throughout the remainder of 2022, representing a 32.8% departure from its 2022 highs.,” Fitch said in its report.

We expect prices to remain sensitive to the ongoing war in Ukraine, with increased tensions posing an upside risk to our forecasts, highlighted by a 7.2% overnight surge in prices following Russia’s decision to hold a series of referenda in occupied territories of Ukraine, it added further

However, despite the recent escalation of events in Ukraine, we expect the Black Sea grains trade deal to continue facilitating the export of Ukrainian wheat onto global markets and prevent prices from reaching the highs of March 2022. At Fitch Solutions, we expect the USD to continue to strengthen over the short term before peaking in 2023, helping to cap commodity prices throughout 2022 and 2023.

Pakistan is currently experiencing a wheat shortage crisis as the production in the last fiscal year was relatively lower on a year-on-year basis. Meanwhile, the country is set to experience further shortages in the coming fiscal year as the sowing of the major crop has been affected by the inundation of fields with water due to the recent floods caused by monsoon rains.

Pakistan has so far during the 2MFY23 imported 622,515MT of wheat, up 992% from the same period last year. The number is set to increase by the 1HFY23 as government’s strategic are inadequate to meet local demand during the winters.

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