The UAE Wheat: Foreign Matter Causes Equipment Damage


Jul 19, 2023 | Agricultural Markets News

Reading time: 2 minutes

Traders have reported to Post that despite the UAE’s large imports of Indian Wheat, the change in quality has significantly affected operations. One Wheat miller indicated to Post that after the change in origins, foreign matter rose significantly, well above 10 percent from a 90,000 MT shipment they purchased last year. Contacts had reported that high FM from new origins had caused damage to equipment, requiring Wheat to be milled multiple times before it was suitable for sale or further processing. When combined with variable production in India, this factor will likely temper long-term imports of Indian Wheat.

UAE MY 2023/24 all Wheat imports (July 2023 – June 2024) are forecast to increase by 3 percent or 50,000 MT to 1.750 MMT. Post has revised all Wheat imports in MY 2022/23 downward to 1.7 MMT, equal to USDA official estimates. The post attributes this increase to rising domestic consumption due to the growing population and improved tourism sector. Around 92 percent of the UAE’s Wheat imports are raw products, with the remainder coming from Wheat products such as flour, pasta, and couscous.

There is disagreement in available data sources concerning imports. Given the solid economic growth in the UAE supported by various factors, including tourism, oil rents, etc., Post analysis supports the higher import quantities. Post forecast that UAE imports will continue their V-shaped recovery from COVID-19 and then the disruption in global Grain caused by the Ukraine conflict. The UAE all Wheat imports increased by 163,375 MT or 12 percent to 1.547 MMT in MY 2021/22 compared to 1.384 MMT in the previous marketing year. Currently, available data from July to December 2022 puts UAE all Wheat imports at 598,994 MT. The UAE Government source data (UAECSC) report Wheat imports at 1.508 MMT for MY 2021/22.

Securing food commodities is a top priority for UAE’s government as part of its food security strategy. Given the UAE’s fiscal strength, the main food security challenge will not be Grain prices but the availability of commodities from other origins. Fiscal stability will allow the UAE to diversify Wheat origins as long as oil rents remain high.

In MY 2021/22, the UAE diversified to other sources besides India. The EU’s Wheat exports to the UAE increased by 437 percent or 228,912 MT to reach 281,189 MT compared to just 52,277 MT in the marketing year prior. India and the EU represented 72 percent of the UAE’s total Wheat imports in MY 2021/22 took market share from previous majority suppliers, including Russia, Australia, Canada, and Ukraine. The year prior, India and the EU represented a mere 28 percent of total UAE Wheat imports.

The UAE and the EU enjoy a lengthy trade history, with local industry noting that EU origins
are often priced favorably due to proximity and lower logistical costs. According to AgFlow data, the United Arab Emirates imported 0.66 million tons of Wheat in Jan-Jun 2023. In June, key suppliers were Russia (74,750 tons), Australia (73,333 tons), and Bulgaria (44,000 tons).

The UAE Wheat: Foreign Matter Causes Equipment Damage

U.S. Wheat Exports to the UAE Remain Stable

Post forecasts U.S. Wheat exports to the UAE in MY 2023/24 to remain unchanged at 50,000 MT. The Russian export control measures and the Russia-Ukraine war provided opportunities for U.S. Wheat exports to fulfill shortages from Ukraine and Russia. In MY 2021/22, U.S. Wheat exports to UAE increased by 34,283 MT or 218 percent to 49,983 MT compared to only 15,700 MT in the previous marketing year. From July 2022 through January 2023, U.S. all Wheat exports to the UAE were 5,677 MT compared to 3,733 MT same period of the previous marketing year.

Other sources: USDA

Try AgFlow Free

Access Free On Updates for Corn, Wheat, Soybean,
Barley, and Sunflower Oil.

No Credit Card Required & Unlimited Access In Time