Wheat farmers rely on rising prices: Mills face shortages

The global wheat market is facing exciting challenges as farmers in major exporting countries hold back their harvests. In light of currently low prices, flour producers are maneuvering into a precarious situation in which they would be inadequately prepared for a sudden price increase. Normally, grain processors stock up on wheat three to four months in advance. However, mills in Asia, including Indonesia, the world's second-largest wheat importer, are currently only secured for two months. In the Middle East, many mills even have reserves for just 45 days. These limited inventories increase the risk of price spikes, particularly as global wheat reserves are heading towards a nine-year low. The low global wheat prices are due to solid harvests in Australia and Argentina, as well as better growing conditions in major export regions like the USA and the Black Sea area. In Australia, the world's fourth-largest wheat exporter, sales figures for November are at half the level of the previous year. At the same time, farmers in the USA and parts of the Black Sea region are storing their grain stocks in anticipation of higher prices. "Farmers are dissatisfied with the current prices," explains a grain trader from Singapore. This reluctance to sell is causing even the physical market to suffer under price pressure. Black Sea wheat is being offered at lower costs, while the price for Australian wheat is also declining. In this tense environment, farmers like Cordell Kress from Idaho are betting that prices will recover. Instead, some Australian farmers are choosing to sell other crops. This deliberate approach reflects the strategic optimism that keeps hope for future price increases alive.