Jordan Makes a Strategic Wheat Inventory for 2 Years
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In general, Jordan’s Wheat production is negligible. Due to the average rainfall in MY 2022/23, production is expected to increase slightly at 30 TMT, providing close to one week of the country’s annual consumption needs. Wheat yield is declining due to prevailing drought conditions over the last few years, and the decline is driven by climate change, desertification, and seed genetics dilution.
In MY2022/23, FAS Amman forecasts consumption at 960 TMT, unchanged from MY 2021/22. Jordan’s population in 10 years has almost doubled from 6.2 to 10.8 million. The Syrian crisis and influx of refugees to Jordan increased consumption by approximately 500 TMT (83 percent) in 2022. Local pita bread is the main staple of the Jordanian diet, the most basic food in the Middle East. Keeping bread prices affordable is an important objective of the Government of Jordan (GoJ), and they managed to reform (from product subsidy to a direct beneficiary subsidy) the bread subsidy without causing political unrest.
In MY2022/23, the USDA forecasts beginning stocks at 993 TMT inside the country, and 400-500 TMT is contracted for (purchased) at sea and uploaded at the port of origin. Jordan is building up a strategic inventory for two years to confront market instability relating to COVID-19 and the Black Sea turmoil. MY 2023 ending stock is expected at 1.3 MMT.
The GoJ finalized its project to expand local silo capacity at the new port in Aqaba; with a Panamax carrying capacity where the new silos are located. As projects are being completed, they are immediately utilized to capacity. An additional 300 TMT has been constructed as bunker storage; a traditional storage method historically used for paddy rice. There is bunker storage in different parts of Jordan to meet its food security objectives, not only for Jordan but also to serve the region.
Jordan’s Wheat Import
The GoJ’s Ministry of Industry, Trade, and Supply (MIT) is the sole customer of Wheat from international suppliers through a competitive process by the local representatives of multinational companies. The process includes purchasing the lowest price within the preset specifications. On many occasions, MIT would turn down the purchase process whenever the technical staff is convinced the offered price is higher than the average market or that near future prices would be better.
In MY 2022/23, Wheat imports are expected to rise to 1.3 MMT to meet the expansion in storage to mitigate challenges associated with the Black Sea war and COVID-19. The Government is aiming to build up reserves to at least 1.5 years’ worth of consumption but doesn’t have a target date for this endeavor. If this is met will be determined by future international Wheat prices and availability. The top Wheat origin is expected to remain unchanged from MY 2020/21, with Romania as the leading supply port.
During this time of conflict in the region, Romanian Wheat is being consolidated and transshipped through neighboring countries, including Russia, Ukraine, Hungary, Bulgaria, and Serbia. The war in Ukraine will change the export map into a new shape. According to the AgFlow data, Romania led their import market with 1.1 million MT in 2021-2022, followed by Bulgaria (0.08 million MT). Jordan is not expected to import Wheat from the United States in MY2022/23.
In 2020, Jordan imported Wheat worth $450 million, becoming the world’s 31st most significant importer of Wheat. In the same year, Wheat was Jordan’s 6th most imported product. Jordan imports Wheat primarily from: Romania ($292M), Ukraine ($79.6M), Russia ($77.5M), India ($433k), and Kuwait ($291k). The fastest-growing import markets in Wheat for Jordan between 2019 and 2020 were Russia ($76.1M), Romania ($23.7M), and Ukraine ($9.92M).
Other sources: USDA
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